Chinese trader added in Pharmally graft case
The Office of the Ombudsman has reversed its decision clearing a close associate of former President Rodrigo Duterte’s old economic adviser, Chinese businessman Michael Yang, of liability in an alleged conspiracy that allowed Pharmally Pharmaceutical Corp. to corner multibillion-peso government contracts during the pandemic.In an 18-page order approved by Ombudsman Samuel Martires on May 2 but made public on Thursday, a special panel of investigators amended an Aug. 14, 2023, resolution to include Lin Weixiong among the respondents for his alleged role in the “highly irregular scheme” with officials of the Procurement Service of the Department of Budget and Management (PS-DBM).
Lin, also a Chinese national, is now facing one count each for violation of Section 3 (e) of the Anti-Graft and Corrupt Practices Act in the 2021 and 2022 procurement of the following RT-PCR test kits: 8,000 BGI real-time fluorescent test kits, 2,000 A*Star Fortitude test kits, and another 41,400 BGI real-time fluorescent test kits.
The earlier resolution had dismissed the case against Lin.
Antidummy law
According to the order, Lin, who had business ties with Yang, served as the financial manager of Pharmally despite being a Chinese citizen, in violation of the antidummy law.
Lin is the husband of businesswoman Rose Nono Lin, who also had ties to companies linked to Yang.
Citing the 87-year-old law, the Ombudsman said the payment for the 51,400 units of test kits was issued while Lin was the financial manager “enjoying extraordinary power over the corporate funds in Pharmally’s depository bank.”
The Ombudsman pointed to Pharmally’s records that showed Lin having full access and control over the financial assets and properties of the company.
“With such broad power conferred upon Lin… it was obvious that his appointment and designation as finance manager breached the prohibition of the Anti-Dummy Law,” read the order.
It then noted that Pharmally earned millions from anomalous transactions with PS-DBM under Lin’s watch.
The Ombudsman cited the company’s financial statements indicating that Pharmally “had no business activity” from when it was incorporated in September 2019 to December of the same year.
“But in 2020, whe[n] PS-DBM irregularly awarded procurement contracts to Pharmally, the corporation earned a net taxable income of P318,337,099, with a declared net sales/revenues/receipts/ fees of P7,485,401,046.”
Motu proprio review
“It is evident Lin exercised the full bundle of rights associated with the ownership of Pharmally’s bank account,” the order stressed.
It went on, “From this premise flows the logical interference that he had the power to dispose of, utilize, deal with, or transact as he sees fit the funds that Pharmally derived from the anomalous procurements.”
The inclusion of Lin in the graft charges stemmed from the Ombudsman’s motu proprio (on its own) review of the case after another respondent, former Budget Undersecretary Lloyd Christopher Lao, who was the head of PS-DBM when it awarded the contracts to Pharmally, filed a supplemental motion for reconsideration.
However, the Ombudsman, in the same order, denied Lao’s motion for “lack of cogent reasons to reverse or modify” the earlier resolution.
The other respondents liable in the three deals were Overall Deputy Ombudsman and former procurement director Warren Rex Liong, procurement management officer Paul Jasper de Guzman, former procurement division chief Webster Laureñana, Pharmally president Twinkle Dargani, Pharmally treasurer and secretary Mohit Dargani, company directors Linconn Ong and Justine Garado, and board member Huang Tzu Yen.
In August 2021, the Senate blue ribbon committee launched an investigation on several medical supply contracts, including face shields and COVID-19 test kits, involving Pharmally and PS-DBM.
Former Sen. Richard Gordon, then the committee chair, presented copies of financial documents identifying Lin as the “financial manager” of Pharmally.
Duterte, Yang
Yang was also implicated as Pharmally’s alleged guarantor and financier, which he denied. Duterte also defended Yang and cleared him of any involvement in the case.
The monthslong inquiry, from August 2021 to January 2022, culminated in a draft committee report that endorsed criminal charges against several public officials and private individuals and accused Duterte of betraying the public trust. The report, however, was archived at the close of the 18th Congress in June 2022 for not having enough signatures.
In August 2023, the Ombudsman endorsed graft charges against Lao and 12 others.
Lao, Liong, De Guzman, and Laureñana were also held administratively liable for grave misconduct, gross neglect of duty, serious dishonesty, and conduct detrimental to the service’s best interests.
Among the penalties imposed on the officials were dismissal from the service, forfeiture of all retirement benefits, and a lifetime ban on government service.
Former PS-DBM officers Christine Marie Suntay, Jasonmer Uayan, and August Ylagan were also found guilty of gross neglect of duty and conduct prejudicial to the best interests of the service and given the same penalties.
