Alphaland’s Oreta to Mercado: It was you who wanted kickbacks

Published January 22, 2015 8:22pm

The land deal between the Boy Scouts of the Philippines (BSP) and Alphaland Corp. is one of "best and most successful investments" of the BSP, the president of the property developer has said in a letter to former Makati Vice Mayor Ernesto Mercado.

Alphaland Corp. attached its president Mario Oreta's letter to its statement denying Mercado's allegations in a Senate Blue Ribbon Subcommittee hearing that Vice President Jejomar Binay got P200 million in kickbacks from the Alphaland-BSP deal.

Oreta told Mercado that it was the former Binay ally that dropped less than subtle hints that he should get some "benefits" as facilitator of the transaction between the two sides.

Contrary to Mercado's allegations in the Senate hearing, Oreta said the project which will be completed by third quarter of this year would have a market value of over P21 billion.

"Thus, the original contribution of the Boy Scouts for its 15 percent of the project would be worth more than P3 billion or more than five times its original investment value thus, making it undoubtedly one of the best and most successful investments that the Boy Scouts ever made," he said.

According to the letter, the entire deal was "personally negotiated" by Mercado as "Senior Vice President and Head of Asset Management."

"In fact, the contract between Alphaland and the Boy Scouts was signed by you in this capacity and not by Vice President Binay," Oreta said.

"I am sure you will remember that you made less than subtle hints that some "benefits" were due to you for agreeing to conclude this project, and I am sure that you will also remember what I explained to you that Alphaland was a joint venture company with the Ashmore Group, and that every transaction was closely scrutinized by Ashmore. Thus, it was impossible for Alphaland to agree to give you any such "benefits," he said.

According to the letter, Mercado called Oreta "just before Christmas" regarding the intention to include the company in the Senate probe.

"I told you that the Alphaland Boy Scouts deal was entirely above board and any attempt by you to state or infer otherwise would be vigorously opposed by Alphaland Corporation," he said.

In a statement on Thursday, Alphaland Corp. Mercado's allegations, saying that it planned to sue Mercado for criminal libel and defamation and will claim at least P100 million in damages before the proper courts.

"Alphaland categorically, and in the strongest possible terms, denies these baseless and false allegations of Mr. Mercado," the company said in an e-mailed statement, citing earlier reports of a newspaper.

"There was no 'kickback' paid to any government official in connection with the Alphaland-Boy Scouts project," it further read.

Oreta told Mercado that an independent appraisal company in 2008 and valued the property at P1 billion.

"Obviously, Sime Darby which owned 40 percent of the property had their own appraisal made, and it was on this basis that Sime Darby readily agreed to sell the 40 percent ownership to Alphaland for P400 million," he said.

"Thus, when the Boy Scouts contributed its 60 percent ownership to the project, it was valued on the same basis as the appraisal and selling price of Sime Darby to Alphaland, i.e. P600 million, thus earning it a fully carried interest of 15 percent of the project which was estimated to cost P4 billion, all of which would be paid for by Alphaland," he said.

Mercado, at the Senate blue ribbon subcommittee hearing on the alleged overpriced Makati City Hall Building II and other alleged anomalies involving Binay, said the Vice President received an initial five percent from the deal.

"Ang five percent na ito ay umabot ng halos P200 million habang ang Boy Scouts ay wala pa ring natatanggap," Mercado told the panel on Thursday. —Kathryn Mae P. Tubadeza/NB, GMA News

Tags: alphaland, jejomarbinay, makaticityhallbldgii