P234M in ‘anomalous’ Pagcor deal returned to gov’t

Andrea Domingo, Pagcor chair and CEO, and Atty. Roderick Consolacion, Pagcor VP for Corporate at Legal Services Department, appear before the Senate. INQUIRER FILE / GRIG C. MONTEGRANDE

The P234 million in advance rental and security payments earlier paid to Vanderwood Management Corp. by the Philippine Games and Amusement Corp. (Pagcor) has been returned to the state gaming firm — but under protest.

Appearing at a hearing of the House good government committee on Tuesday, Pagcor chair Andrea Domingo said she ordered the check issued to Pagcor by Vanderwood guaranteeing the payments after questions had been raised during the February hearing by the House panel.

The Commission on Audit (COA) has issued a notice of disallowance on the deal after finding it to be “highly irregular and anomalous.”

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“I decided to have that check deposited the next day [after the hearing], and it cleared on the next clearing day,” she said.

“Although when I was served the notice of disallowance, I already [got] a notice of demand from Vanderwood. Consequently they haled us to court asking for a TRO which has not been granted. But the case is still pending,” Domingo said.

She said she was aware she was taking a risk in depositing the check, as under the rules Vanderwood still had six months to file an appeal on the COA disallowance.

“When i deposited the check, I took the risk of being sued in court for denying them that appeal but I was saying that i would rather be haled court for doing something for the government than being investigated …on suspicion that we had something to do with this contract,” Domingo said.

But Vanderwood owner Manuel Sy insisted that Pagcor’s payment of P234 million in advance rental and security deposit had been above board.

“While the building did not exist at the time the lease was agreed upon, the payment of advance rentals and security deposit formed part of the consideration, without which Vanderwood would not have entered into the contract,” Sy said in a position paper submitted to the House panel.

Upon questioning by Speaker Pantaleon Alvarez, the Vanderwood owner said his company had invested too much in the deal to allow it to be rescinded so easily.

He said the property was 98 percent complete and should be ready for moving-in in two weeks, though “not perfect.”

In 2015 Vanderwood leased a 6,500-square-meter property to Pagcor for 15 years in a “build-to-suit” arrangement.

The property in the lease contract is owned by the Manila government and located within the Museo ng Maynila complex, formerly known as the Army Navy Club, a historic landmark at the edge of Manila Bay next to the US Embassy compound.

The city government leased the property to Oceanville Hotel and Spa Corp. in January 2014 for P300,000 a month. On the other hand, Oceanville subleased the property to Vanderwood for the same amount.

Under the deal, Pagcor agreed to pay Vanderwood P13 million a month for the lease of the building that Vanderwood was supposed to construct under the specifications set by the gaming agency.

In December 2015, an initial P234 million was paid by Pagcor to Vanderwood to represent 12 months advance and six months security deposit. CBB