Esquivias' challenge

Looks like it might take some time before the dust settles on the issue of the sudden resignation of Bureau of Internal Revenue chief Lilian Hefti. Metro Manila’s rumor mill is still abuzz with various speculations concerning the reasons for her unexpected exit.

Some quarters are still fanning the scuttlebutt that Hefti was given a gracious exit in the aftermath of a below par revenue performance, while others are toying with the dangerous ruse that questions were raised as to who is the funding source of her overseas studies. We prefer to let the former BIR chief keep her dignity, so we will respect the official reason given for her resignation – health.

Regardless of what the real reason might be, the fact remains that Hefti has left behind a major revenue-generation challenge to her successor, newly-appointed BIR chief Sixto Esquivias IV. Hefti left with a collection level that is five percent off the original target; Equivias will have to plug a lot of holes.

While the new BIR chief is plugging holes, he might wish to immediately take a look at another possible drip in the leaking BIR faucet: the controversial plot to tax-exempt the transfer of the P12-billion Sta. Ana racetrack to the P25-million-or-so holding firm called JTH Davies owned by a faction of the Philippine Racing Club, Inc. (PRCI) board led by Wincorp’s Santiago Cua Sr. known in local Chinese circles as Cua Sing Huan.

Esquivias may need to know that the plot to exempt the transaction from the payment of nearly half-a-billion pesos in value-added taxes was foiled by the alert Finance Secretary Gary Teves who immediately instructed the former BIR chief to shelve a BIR resolution granting the exemption.

Following Teves’ stern directive against the silver-plattered VAT exemption that Cua Sing Huan’s group nearly ran away with, Hefti issued a memorandum to PRCI informing them that the property transfer has been assessed VAT and other taxes of more than P400 million.

Esquivias will find at his table when he reports for work a strongly-worded letter from a giant accounting firm telling his predecessor that the BIR was wrong in assessing Cua Sing Huan’s group half-a-billion pesos in VAT.

The new BIR chief might also be interested to know that Hefti has not rescinded nor recalled the earlier BIR resolution exempting the controversial property transfer from VAT.

We are sure the Esquivias knows the government can do a lot with that prospective P400-plus million in VAT due from the PRCI-to-JTH Davies property transfer. But BIR insiders are reportedly still worried that the lack of familiarity with the issues engulfing the beleaguered Santiago Cua Sr. group and his Malaysian allies might push Esquivias to cave in to the Cua Sing Huan pressure.

We suggest we give the new BIR chief a chance to prove his mettle. After all, he is not a total stranger to the job – he rose from the ranks, from examiner to deputy BIR commissioner during his first 23 years at the bureau. He may need all our best wishes though. Running an agency such as BIR is never easy.

The Moreno tale goes on

The trail leading to the recovery by creditors of embattled Liberty group of companies of their soured exposure running into billions of pesos seems to have crossed national boundaries. Whatever happened to the rehabilitation of the erstwhile Moreno-led companies?

Following the reported sale by businessman Raymond Moreno of his controlling shares in publicly-listed Liberty Telecoms to Qatar Telecoms, the prospects get murkier for the creditors of Liberty and its subsidiaries Liberty Broadcasting Network and Skyphone Logistics that are under rehabilitation.

Even as we have received information that Moreno already got $24 million of the over $40 million Qatartel deal for his shares, fresh reports have it that Moreno had brought a substantial portion of the payment overseas. Industry sources say the proceeds of the sale found its way to China.

And it is not unlikely though. Sources say that along with his alleged domestic spending spree, Moreno found a safe haven for the Qatartel money in China instead of paying off Liberty’s creditors and setting off the firms’ rehabilitation.

Why China? Some of the creditors say it is probably because the Chinese government has not barred laundered wealth from entering its territories.

Creditors of Liberty remain locked in a 10-year rehabilitation plan approved by the court. In the rehabilitation plan, Moreno represented that he was committing his Liberty shares in order for investors to come in and infuse needed funds to make the companies viable.

Since he has already sold his shares in Liberty, isn’t it but prudent for Moreno to pay off Liberty’s creditors? It is of course all up to the rehabilitation court to investigate this alleged sale of Liberty shares and to find out the whereabouts of the proceeds. But since Liberty is a publicly listed company, the investing public also deserves to know whatever happened with their investment-gone-wrong.

For comments, e-mail at [email protected]