Edward King, Pagcor senior managing head for corporate communications, pointed out that LIRL was given more than enough time to settle its debts to the government and that the decision to close down Legenda Hotel Casino in the Subic Bay Freeport Zone was intended to protect the interests of the government.
LIRL reportedly owes Pagcor around P365 million in gaming fees while P800 million is due to the Subic Bay Metropolitan Authority (SBMA).
"The bottom line is LIRL has not paid a single centavo of what it owes to the government since March 2001 till now. Pagcor remains firm in its stance that it acted accordingly to its duty as the legally-mandated gaming regulatory agency of the government. As such, it is committed to protect the interests of the Philippine government and the Filipino people," the Pagcor official said in a statement.
When asked whether Pagcor is open to an amicable settlement with LIRL, King said: "The decision to revoke their provisional authority has been made. They have to settle their obligations to the government."
King also accused LIRL of engaging in misrepresentation by padding its expenses to make it appear that it was losing money and therefore, was not able to pay its gaming share to the government. LIRL claimed that its liquidity position was adversely affected by the Asian currency crisis in 1997.
A special audit team formed by Pagcor in 1999 discovered that LIRL was charging expenses of its non-casino units (hotel expenses) to the casino operations, thus causing artificial net loss.
Pagcor was supposed to cancel LIRL’s gaming license then but reconsidered its decision after the casino operator proposed a repayment scheme.
LIRL proposed to pay P60 million a year or P5 million a month guaranteed gaming share each for Pagcor and the SBMA.
As for the debt payments suspension order issued by the Olongapo Regional Trial Court, King said it is no longer enforceable as no rehabilitation plan was approved by the court upon the lapse of 180 days from the date of the initial hearing on LIRL’s petition for debt relief.
"No acceptable rehabilitation plan was presented by LIRL and the 180 days lapsed on July 5, 2005. No extension of the period was given by the court," he said.
In its statement, Pagcor said LIRL is deeply indebted to several foreign and local banks and financial institutions, including Morgan Stanley Emerging Markets, which filed a petition in Hong Kong for the appointment of a Provisional Liquidator to take the place of LIRL’s present board of directors. "This action is supported by LIRL’s other creditors, such as the Metropolitan Bank and Trust Corp. (Metrobank)."
King also said the provisional license Pagcor issued to LIRL did not include the exclusive right to operate a casino in Subic.
He also cited the decision issued by the Olongapo RTC ruling that the cockfighting activity held by LIRL was unauthorized. The court said cockfights, which is a game of chance, should be licensed by Pagcor pursuant to its regulatory powers.
As for LIRL’s claim that the closure would affect future investments into the country, King said foreign investors do their homework before they invest. "I’d like to think that foreign investors coming into the country are professionals and abide by the rules of law."
LIRL chief executive officer Khoo Boo Boon earlier accused the government of allegedly not honoring business contracts after it closed down the Legenda Hotel and Casino.
The Legenda was closed last May by the government after it failed to remit the 15 percent share of its revenues as prescribed in its license to operate.