Hontiveros cites medical supplier’s legal mess, PH political links

WANTED IN TAIWAN Zheng Bingqiang (right), president of Xiamen Fu De Sheng Group, is shown in this late 2015 picture with President Duterte and presidential economic adviser and Group chair Michael Yang during Mr. Duterte’s visit to the company’s headquarters. Zheng, Huang Tzu Yen, the missing CEO of Manila-based Pharmally Pharmaceutical Corp. and his father, Huang Wen-Lai, who chairs Pharmally International Holding Co. Ltd. are wanted in Taiwan for financial crimes, according to Sen. Risa Hontiveros. Inset photo shows Yang’s business card.

MANILA, Philippines — President Rodrigo Duterte had established personal ties and was “interacting” with the people behind the mysterious Pharmally Pharmaceutical Corp., the trading company in the eye of a political firestorm for bagging P8.7 billion worth of government procurement deals in 2020, even before he took office, according to opposition Sen. Risa Hontiveros.

Three people associated with Pharmally and its Taiwan-based parent company, Pharmally International Holding Co. Ltd., are now fugitives from Taiwanese law for financial crimes, including the president of a Xiamen, China-based company chaired by former presidential economic adviser Michael Yang, Hontiveros said.

In an online press briefing, the senator showed the “family tree” of the foreigners behind the Pharmally group, whose executives had apparently disappeared and could not be reached at their listed addresses in the Philippines.

Hontiveros presented documents confirming that Huang Tzu Yen, the missing CEO of the Manila-based Pharmally now being investigated by the Senate for winning “overpriced” medical supply contracts last year, and his father Huang Wen-Lai, who chairs Pharmally International, were wanted for financial crimes.

The younger Huang, who is listed by Taiwanese authorities as a Singaporean citizen, is wanted for stock manipulation, while his father is facing charges of securities fraud, stock manipulation and embezzlement, based on information from Taiwan’s publicly available fugitive database.

“Why is this government transacting with fugitives?” Hontiveros said.

“Pharmally seems to be a breeding ground of criminals. Why are we doing business with people who are the subject of a warrant of arrest?” the senator said, noting that Pharmally won another government contract for medical supplies as recently as June, months after the Huangs went into hiding.

2015 Xiamen visit

Huang’s father, who was introduced by Yang to the Duterte in March 2017, was accused of colluding with another wanted person for the stock manipulation scheme — Zheng Bingqiang of Fu De Sheng or Full Win Group of Companies based in China, whose chair is Yang, also known by his Chinese name Yang Hongming.

In late 2015, Duterte visited Yang and Zheng in Xiamen and toured the Fu De Sheng offices, with pictures of the meeting splashed on Chinese social media.

“Considering that Zheng Bingqiang is involved in Pharmally as shown in the warrant of arrest we showed earlier, this means that President Duterte has been interacting with Pharmally since 2015,” Hontiveros said.

The senator said she was curious about how deep the relationship might be between Zheng and Yang, who also chairs the Philippine Full Win Group of Companies.

Yang had developed a real estate business and opened a mall in Davao City when Duterte was still the mayor and forged a long friendship with him.

In 2018, Yang was appointed presidential economic adviser on a one-peso-a-year salary, but the appointment was not renewed after Yang figured in a number of controversies including an alleged link to the drug trade, for which he was defended by the President.

Hontiveros presented an English translation of a news article in a Chinese publication, Haixi Morning News, dated Oct. 21, 2016, which she said might help illuminate the relationship between the president, Yang, and Zheng.

“Online information shows that Duterte is 31 years older than Yang Hongming. But Zheng Bingqiang introduced that Yang Hongming had a special affinity with Duterte,” the Haixi report read in part.

“The two crossed the age gap and became friends. The two sides treat each other sincerely, and this friendship lasted for more than 10 years,” it said.

Must be explained

Hontiveros said Duterte should explain his association with Zheng, which preceded his ascent to the presidency in 2016.

“And of course, there’s that video of Duterte meeting Pharmally officials in 2017,” she said, referring to the clip from Radio Television Malacañang of the March 17, 2017, meeting in Panacan, Davao City, between Duterte, Yang, and officers of Pharmally International led by its chair, Huang Wen-Lai.

“Is there more to this story than what the president is leading us to believe? Is this the reason why yesterday, the president could not stop himself from defending Michael Yang?” Hontiveros said.

Senators learned that Pharmally Pharmaceutical, whose business is to supply medical products and devices in the Philippines, was incorporated in September 2019 with a paid-up capital of only P625,000.

Despite being undercapitalized, it was awarded P8.7 billion worth of contracts by the Procurement Service of the Department of Budget and Management (PS-DBM) to supply the Department of Health (DOH) with face masks, personal protective equipment (PPE) sets, and COVID-19 test kits.

Health Secretary Francisco Duque III authorized the transfer of P42 billion of the DOH’s pandemic response funds to the PS-DBM for the negotiated procurement of emergency supplies in mid-2020, but the Commission on Audit flagged the transaction because there was no memorandum of agreement to accompany it.

Senate Minority Leader Franklin Drilon also noted overpricing in the Pharmally contracts with quoted prices more than double the prevailing market rate at the time, including prices offered by other companies contracted by the PS-DBM.