Revenue threat

With Bureau of Internal Revenue (BIR) chief Lilian Hefti out, the business community is abuzz with speculations about how her replacement will treat the close to half-a-billion pesos in tax obligations levied under Hefti’s administration against a group backed by a giant Malaysian gaming conglomerate.

The last few days, coffee shops in Metro Manila were abuzz with speculations that the Santiago Cua Sr.-Malaysian-backed faction of the board of directors of the Philippine Racing Club, Inc. (PRCI), welcomed the exit of Hefti.

Prior to her resignation, Hefti had written the Santiago Cua Sr.-Malaysian-backed faction of the Philippine Racing Club Inc. (PRCI) board saying that the transfer of the ownership of P12-billion Sta. Ana racetrack to JTH Davies has been assessed value added taxes of about P480 million.

BIR’s assessment came after Finance Secretary Gary Teves directed the bureau to review an earlier tax exemption ruling it gave to the said faction.

In turn, the Cua group said it was “disengaging” from the process of transferring the prime Sta. Ana property to the JTH Davies corporate shell that the Cua group and the Malaysians own and control. Does disengaging mean withdrawal or just a temporary retreat?

Skeptics, however, immediately probed whether or not the Cua group was using the word “disengaged” synonymously with “withdrawn”. It now appears, according to our BIR sources, that they are not.

According to BIR sources, the Cua group, which was also involved in the Westmont Investment Corp. (WinCorp) debacle in the 90’s, is using a high-powered accounting firm to question and protest the Hefti assessment.

The accounting firm has reportedly written Hefti a strongly-worded letter demanding that she stick by her earlier ruling that the transfer of the prime Sta. Ana property to the Cuas’ corporate shell is tax exempt.

Will the new BIR administration fight Hefti’s battle? With revenue collections way off target, P480 million will definitely go a long way.

Qatartel after Moreno?

Earlier, we’ve reported that businessman Raymond Moreno has sold his controlling shares in Liberty Telecoms to Qatar Telecoms and that the Arabian telco has started to take over by putting four of its nominees in the board.

There were also reports that Qatartel has offered a minority stake to a local group and that the former has started scouting for a local CEO to oversee Liberty under the supervision of its Singaporean advisers who are already on town.

Also, there were unconfirmed rumors that Qatartel has just paid a substantial amount to Moreno, enabling him to engage in a spending spree.

But latest developments indicate that Qatartel is now pulling out of Liberty.

Sources say that in order to induce Qatartel to buy the controlling stake in Liberty, Moreno represented that Liberty had an existing frequency assignment under the 450 Mhz band for broadband use.

However, Qatartel discovered from the National Telecommunications Commission (NTC) that Liberty does not have any frequency assignment under the claimed band. Rather, all assignable frequencies under the 450 Mhz band were already with Globe and Textron and that both telcos are presently operating under said frequency band.

The Arab firm learned from the NTC that it was not possible for Liberty to be assigned a frequency under said band since this will cause interference to the existing services of Globe and Textron.

Qatartel is now reportedly suing Moreno for fraud and demanding the return of the amounts it has paid to Moreno. Of the $44 million purchase price, Qatartel  allegedly paid him $24 million.

The foreign firm is likewise planning to go after its local counsel for failing to discover Moreno’s misrepresentation in the due diligence they supposedly conducted on Liberty’s assigned frequencies.

Humiliating incident

Valenzuela Mayor Sherwin Gatchalian has filed a civil case against the management and staff of the Discovery Shores Hotel in Boracay for a humiliating incident he experienced Dec. 30 of last year.

Sources from Gatchalian’s group say the mayor would have pursued the case before the Valenzuela City RTC if only the management of Discovery Shores were humble enough to accept their fault when they refused to accommodate the mayor in their restaurant for a late dinner with his friends.

The young Gatchalian, himself, is not new in the hotel and restaurant business since his family owns a number of hotels including the Manila Pavillion, the Waterfront Hotels in Cebu City and Mactan and until recently, the Holiday Inn in Clark Field in Pampanga.

In his complaint, Gatchalian said they left the restaurant after feeling very much humiliated, insulted and discriminated against in front of so many people and confused as to why their patronage was rejected for no apparent valid reason.

He further said: “I want this incident to be known in order to warn the public that establishments like this are only allowed to operate if and when they follow certain standard of decorum like providing good service and not discriminating in providing service to the public.  I have done numerous efforts in setting up government policies and implementing projects to boost the tourism potential of our country, both in my private capacity and public positions then and now, because I fervently believe that tourism will help our economy tremendously and put back our country on the map of big players and able competitors in this industry.  I surely don’t want a few narrow minded people with no feel and understanding whatsoever of what good service is all about.”

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