VACC sues DTI chief, Hyundai execs for plunder, technical smuggling

Trade Secretary Ramon Lopez is facing plunder, estafa, and technical smuggling raps for supposedly favoring unjustly an automobile manufacturer that resulted in a loss of P1.1 billion in taxes and Customs duties from September 2016 to May 2017.

Also named respondents to the case filed on Thursday by the Volunteers Against Crime and Corruption are three executives of Hyundai Motor Company, six officials of Philippine-registered Hyundai Asia Resources Incorporated (HARI), and its Customs broker.

Lopez supposedly gave HARI “preferential treatment” even after the Philippine Board of Investments, which he chairs, saw fit to cancel the automotive firm’s registration under the government’s Motor Vehicle Development Program (MVDP) for allegedly making false representation.

The complaint alleged that Lopez gave the company the “luxury of time in complying with the terms and conditions of the MVDP” despite “incontrovertible evidence of HARI’s guilt.”

Lopez, however, is denying the facts of the case as presented by the VACC.

“Really? Should not be the case,” he told reporters, when asked to comment on the matter.

“We—BOI—were the ones who investigated and suspended their MVDP license. And asked for the collection of what’s due to government,” the Cabinet official noted.

“I believe we just did our job. And BOC is the agency computing for the Customs duties due to government. So not even determined by BOI. So I don’t know where they are coming from,” he said.

According to the complaint, HARI qualified to take part in the MVDP and enjoyed as other qualifying carmakers “a preferential tariff rate of 1 percent in the importation of completely knocked-down units, its parts and components.”

But its registration was supposedly approved to be canceled on May 31, 2017 after an ocular inspection on February 7 that same year allegedly showed “an absence of basic assembly processes” in its manufacturing plant in Sta. Rosa, Laguna.

The inspection revealed that the car factory had no assembly jigs and welding machines, as well as painting and welding processes.

There were simply “pallets of newly delivered and fully painted body shells of EON and H350s, with steering wheels, seats, front and back lights, and side mirrors already installed.”

“Only the installation of engine, tires and batteries and quality testing/inspection are being undertaken within the facility,” the complaint said.

The BOI also ordered HARI to refund the value-added tax and Customs duties that were waived in favor of the car company in the amount of P544.6 million for the Hyundai EON and P557.7 million for Hyundai H350, the complaint noted.

HARI’s motion for reconsideration of the refund order, supposedly filed on June 30, 2017, was denied only on January 3, 2018, or more than six months later, it said.

“From the inordinate delay in the resolution of HARI’s Motion for Reconsideration, i.e. six months, to the additional time given to HARI to implement assembly processes of welding and painting, respondent Lopez gravely abused his position as BOI chairman, to favor the interest of HARI, and minimize whatever possible charges the latter may face,” the complaint said.

VACC lawyer Ferdinand Topacio told GMA News Online the complaint was prompted by “concerned BOI employees.”

The respondents are also facing technical smuggling a complaint for supposedly “having paid only 1 percent tariff duties for CBUs, (completely-built-up motor vehicles) when it should have been 30 percent.”

The VACC also accused them estafa based on what the anti-crime group claimed was HARI’s fraudulent representation when it said it “will comply with all the requirements under the MVDP when in fact HARI only undertakes final assembly and quality testing/inspection.”

Because of this fraudulent representation on the part of HARI, the BOI was “induced” into allowing its participation in the MVDP, the VACC also claimed, saying that as a result HARI enjoyed “preferential tax rate of 1 percent in its importation of motor vehicles, when the same should have only been limited to CKDs.”

The VACC also claimed that the respondents conspired with one another in committing the crimes mentioned in its complaint.

“We have alleged conspiracy, so the acts of one are the acts of all,” Topacio said. —VDS, GMA News