‘Superman’ vs Mighty

NBI APPEARANCE Alexander Wongchuking (right), president of Mighty Corp., arrives at the National Bureau of Investigation office in Manila with former NBI Deputy Director Reynaldo Esmeralda following the seizure of P2 billion worth of Mighty cigarette packs with fake tax stamps at the company’s warehouse in San Simon, Pampanga. —MARIANNE BERMUDEZ

President Duterte, known as “Superman” to a confessed hit man of the so-called Davao Death Squad when he was mayor of Davao City, is taking on Mighty Corp., a Filipino cigarette manufacturer accused of massive tax evasion.

Mr. Duterte said on Tuesday he had ordered the arrest of Alexander Wongchuking, the owner of Mighty, for using fake tax stamps on its products.

But he downplayed reports that Wongchuking had tried to bribe him. He said that when he was the Davao City mayor, he was gifted with cash, which he ordered returned.

“Yes, I ordered his arrest. He’s the one behind it, the fake cigarette stamps,” Mr. Duterte told reporters in Malacañang, referring to Wongchuking.

Asked about reports he was offered a bribe, Mr. Duterte
declined to call it a bribery.

He said he was gifted a gun last Christmas, which he did not accept.

The bribe offer was discussed during the Cabinet meeting on Monday, presidential spokesperson Ernesto Abella said in a press briefing.

Those who would try to bribe government officials should be scared, Abella said, “because the law will come down full force upon them.”

Earlier on Tuesday, the chief presidential legal counsel, Salvador Panelo, said Mr. Duterte wanted Wongchuking arrested for economic sabotage for using fake tax stamps.

Mighty owner at NBI

The President’s arrest order prompted Wongchuking to show up at the National Bureau of Investigation and the Department of Justice (DOJ) “to explain his side.”

But the NBI could not arrest and detain Wongchuking despite Mr. Duterte’s accusation of economic sabotage against the Mighty president.

“We cannot hold him,” two NBI sources said, as Wongchuking had no pending arrest warrant.

The businessman went to the NBI office on Tuesday morning, along with Mighty lawyer Sigfrid Fortun, and met with NBI Director Dante Gierran and other bureau officials.

He stayed at the NBI office for about an hour and left to have lunch, before his 2 p.m. meeting with Justice Secretary Vitaliano Aguirre II.

Accompanied by Fortun, Wongchuking spoke with Aguirre and Gierran in a closed-door meeting at the DOJ office.

A source close to Wongchuking said the Mighty owner went to the NBI office to “grant Gierran’s invitation.” Gierran called up a friend, who could “bridge” the NBI to the tycoon, and asked: “Maybe he [Wongchuking] can come here tonight [Monday] or tomorrow morning [Tuesday]?”

When Wongchuking learned about the invitation, which the source said was done because of Palace’s alleged arrest order, the businessman said: “Why, what have I done?”

Competition

Mighty Corp., which operates a factory in the City of Malolos in Bulacan province, produces Cortos, Regaliz Largos, American Blend 30s, American Blend 20s and American Blend Level-Up brands.

It reported a net operating income of P338.22 million in 2014, up 41 percent from P239.63 million in 2013.

Philip Morris International Inc. (PMFTC), which merged its Philippine operations with Lucio Tan’s Fortune Tobacco Corp. in 2010, has seen its market share slide amid stiff competition from Mighty’s cheaper products.

PMFTC produces Marlboro, L&M and Philip Morris as well as homegrown Fortune, Jackpot, Champion and Hope.

‘Airtight’ case readied

Finance Secretary Carlos Dominguez III on Tuesday said the government was preparing to file an “airtight” tax evasion case against Mighty.

Also on Tuesday, the Bureau of Customs (BOC) uncovered in Cebu City and Tacloban City packs of Mighty cigarettes that bore fake tax stamps.

The BOC said it was preparing to press charges against Mighty following last week’s raids in General Santos City and Pampanga that yielded Mighty cigarettes with over P1.1 billion in unpaid excise taxes.

Customs Commissioner Nicanor Faeldon himself was present when a shipment
containing Mighty cigarette packs was opened in the ports of Tacloban and Cebu. The shipment was confirmed to be carrying packs with fake tax stamps.

In all, the two bureaus seized 11,044 master cases of Mighty cigarettes worth P215 million in General Santos City, on top of 62,200 master cases worth P1.98 billion in San Simon, Pampanga province.

The 73,244 master cases contained 36.622 million packs, which at an excise tax of P30 a pack will result in foregone revenues for the government totaling P1.099 billion.

Last month, the Bureau of Internal Revenue (BIR) also confiscated 82,902 packs of Mighty cigarettes reportedly also bearing fake tax stamps
in Cebu, depriving the government of P2.49 million in
excise taxes.

‘Malfunctioning’ stamp readers

In a statement, Mighty blamed malfunctioning BIR excise-stamp validating devices that produced different results when used on Tuesday on its products that were seized in what it called unlawful raid on its warehouses in Pampanga.

Fortun, a Mighty lawyer, said that when the devices were used by BIR examiners on the confiscated cartons bearing Mighty cigarettes, they registered a green light indicating they were genuine stamps.

Later, these registered red or bogus marks for stamps on the same carton, he said.

“Worse, when the same device was used to test tax stamps on products of its competitors brought in by one of the agents, the device also turned red, indicating that the competitors stamps were fake,” Fortun said in a statement.

On the alleged attempt to bribe Mr. Duterte, Fortun denied any participation by Mighty.

When he was mayor, the President said he was asked for a favor, “but I said I am not into it.” But a package was left with him.

“There was no bribery because nothing was said,” Duterte said.

But when his aide checked the package and saw that it contained money, he had the cash returned.

“I said, give that back to that jerk. He caught up with him on the airplane itself in Davao,” Mr. Duterte said. —WITH REPORTS FROM BEN O. DE VERA AND INQUIRER RESEARCH