Gatchalian wants Senate probe into PAGCOR's deal with third-party POGO auditor

Senator Sherwin Gatchalian has filed a resolution seeking a Senate investigation into the alleged irregularities in the hiring of the third-party auditor that assesses the Philippine Offshore Gaming Operators' (POGO) revenues.

The filing of proposed Senate Resolution 452 stemmed from the fourth hearing of the Senate ways and means committee, where they found out that Global ComRCI was not credible and not capable of doing the POGO audit, and it was allegedly awarded a contract based on "spurious" bank certifications.

According to Gatchalian's resolution, the notice of award for the procurement of the Philippine Amusement and Gaming Corporation's (PAGCOR) Consultancy Services for the Development, Operation, and Management of Intermediation Platform/Audit Program was issued on October 26, 2017 to a consortium between Global Myoho Renge Copy, Inc., Highweb Trade LTD, and Comfac Corporation or Global ComRCI Consortium for a total annual contract price of over P552 million payable per year for a span of 10 years.

The notice to proceed was issued to the consortium on December 19, 2017.

Under the terms of reference of PAGCOR's audit program, the consultant must have an operating capital of at least P1 billion, have implemented similar projects in at least three other gaming jurisdictions with standards at par with or higher than the Philippines, and have been engaged in the same field of business for not less than 10 years.

PAGCOR's rules also require all joint ventures that intend to join the bidding to register with the Philippine Securities and Exchange Commission prior to contract execution.

Global ComRCI has submitted a bank certification from Soleil Chartered Bank indicating that one of the firms in the joint venture, Global Myho Renge Inc., has US$25 million in compliance with the PAGCOR POGO Consultancy Bidding as required operating capital for the award.

While PAGCOR ruled that Global ComRCI had passed the financial capability requirement for the project during the recent Senate ways and means committee hearing, the Bangko Sentral ng Pilipinas said that Soleil Chartered Bank is not registered with them and is not under its supervision.

Gatchalian said that the completed projects in the documents submitted by the consortium are not projects with a government gaming regulator like PAGCOR.

He also mentioned that the incorporation documents of the members of the consortium showed that only one has been in existence for more than 10 years, but it is not engaged in the same field of business as the consultancy services.

Gatchalian cited a letter from the SEC that showed that Global ComRCI is not registered with the regulatory body, which is in direct violation of PAGCOR rules for the procurement of consultancy services.

Apart from these, Gatchalian said the office and the operation of the consortium cannot be located.

Gatchalian said that the lack of technical capability of the third-party auditor and its consequent failure to determine the correct gross gaming revenue may lead to the underpayment by the POGOs of the 2% franchise fees to PAGCOR and the 5% gaming tax to the Bureau of Internal Revenue.

"[I]t is indispensable that the qualifications of the third-party auditor be properly evaluated and established, as its incapacity and inability to perform its job may lead to revenue loss on the part of the government," he said.

"It is equally important to note that the consultancy services awarded to an entity whose whereabouts [are] unknown [amount] to almost P6 billion in the course of 10 years; thus, it is imperative that this seemingly anomalous government procurement and public expenditure must be examined and accounted for with zeal and vigor in order to maintain the trust and confidence of the people [in] the government," he added.

In an interview on Super Radyo dzBB last week, PAGCOR chairman and CEO Alejandro Tengco said Global ComRCi has complied with all bidding documents.

"I don't see any irregularity in the contract because if you will go through the documents that they did submit during the time of the bidding, one thing is clear: they complied with the requirements of the [terms of reference]," Tengco earlier said. —VBL, GMA Integrated News