BCDA sues John Hay developer for fraud

BAGUIO CITY—The Bases Conversion and Development Authority (BCDA) filed fraud charges last week against officials of a firm developing Camp John Hay, claiming the company settled part of its debts by turning over to the government a multimillion-peso log cabin that was previously sold to another buyer.

Lawyer Arnel Casanova, BCDA president, said the buyer had staked his claim over one of the five log cabins turned over to the BCDA in 2008 as “dacion en pago” (special mode of payment where assets are given in lieu of money), part of the debt settlement agreement incorporated in a 2008 restructured lease deal between the BCDA and Camp John Hay Development Corp. (CJHDevco).

One of these log cabins was the subject of a scandal when it was allegedly given as a gift to former President Joseph Estrada before his impeachment trial in 2000.

But Casanova said the cabin in question is cabin Number 9, not the so-called Erap cabin, which is known as cabin Number 1.

The BCDA tried to auction off the cabins in 2010 to liquidate the assets relinquished by CJHDevco, BCDA records showed.

“These log homes were put up for auction a number of times and it was during that process when we found out that log cabin Number 9 was already sold … The previous buyer went to us [to advise us] that cabin Number 9 was already his,” Casanova said.

In a statement, Casanova said the BCDA filed the complaint before the Department of Justice (DoJ) on Friday, citing all CJHDevco officials as respondents for allegedly hiding the nature of their dacion en pago.

Wrong information

But Alfredo Yñiguez III, CJHDevco executive vice president and chief operating officer, said BCDA’s information was wrong.

“BCDA’s facts are distorted. First of all, there was no [log cabin gifted to] Erap. Secondly, there is no fraud involved since the log cabins were available for dacion,” Yñiguez said.

“The company will respond to BCDA’s latest charges strongly and may file a counter suit if necessary,” he said.

The DoJ complaint was filed days after the BCDA and CJHDevco promised to heed the city government’s request for an out-of-court settlement of their debt feud over unpaid P3.2 billion.

The BCDA and CJHDevco have been criticized by local officials because the city government has not been getting its 25-percent share from CJHDevco’s annual rent payments since 2003, said Vice Mayor Daniel Fariñas.

The BCDA said it had accommodated CJHDevco three times by agreeing to restructure the developer’s 1996 lease three times. The last renegotiation led to the 2008 lease agreement, called Restructured Memorandum of Agreement (RMOA), which was signed by former BCDA president Narciso Abaya, BCDA records showed. This was the deal that allowed CJHDevco to settle its debts through its assets.

The BCDA and CJHDevco did not provide the Inquirer a list of the assets subject by the RMOA.

The RMOA contains a new lease payment scheme, a detailed schedule for turning over the dacion en pago to the government, and the lease agreement between Fil Estate and new investor, Ayala Land Inc.

BCDA statement said CJHDevco paid up to P1.4 billion, which includes the value of the dacion en pago properties, but the agency said the developer was obligated to pay P4.4 billion covering 16 years of real estate development work.—Vincent Cabreza