Senator Win Gatchalian lambasted the Philippine Amusement and Gaming Corp. (PAGCOR) for its failure to comply with its own Terms of Reference (TOR) when it entered into a P6 billion contract with Global ComRCI, the third-party auditor consortium of Philippine Offshore Gaming Operators (POGOs).
At the latest hearing of the Senate Committee on Ways and Means chaired by Gatchalian, it was revealed that PAGCOR did not follow its own TOR, which provided the requirements necessary for an entity to qualify as a third-party auditor of gaming revenues declared by POGO operators. The 10-year contract between PAGCOR and Global ComRCI started in 2017.
“How come nobody saw this? Paano nakalagpas sa inyo ito? It’s either nabudol kayo or nagpabudol kayo,” Gatchalian told PAGCOR officials at the hearing.
The senator said that under the TOR, an entity to be qualified as a third-party auditor must have an operating capital of at least P1 billion. Based on the audited financial statements of the members of the consortium for the third-party auditor, their combined equity does not meet the P1 billion requirement. To comply, Global ComRCI submitted a bank guarantee issued by Soleil Chartered Bank in its favor in the amount of $25 million. However, it was revealed by the Bangko Sentral ng Pilipinas (BSP) that Soleil Chartered is not a registered bank in the country and therefore, cannot issue a bank guarantee in the Philippines.
It was also revealed in the hearing that the office addresses declared by Global ComRCI to PAGCOR were found to be fictitious and inappropriate venues of operation for the entity that it claims to be. Further, Global ComRCI failed to secure the necessary building permits. In the contract, the address is in Makati but in a letter submitted by Global ComRCI to PAGCOR and to the Committee, the address is in Manila. Worse, Makati and Manila certified that no business permit was issued to the third-party auditor.
The committee also found out that Highweb Trade Ltd., which is part of the third-party auditor consortium, does not have the technical expertise to provide the technology for a regulator like PAGCOR as it did not have prior experience as third-party auditor of a government gaming regulator which again violates PAGCOR’s TOR.
To top it all, it was revealed that Global ComRCI, which received payments from the government totaling P824 million to date, is not even registered with the Bureau of Internal Revenue (BIR) as stated in a certification issued by the agency.
“Let’s not forget the crucial role of the third-party auditor in determining the taxes and regulatory fees of POGOs. Bawat piso na hindi binabayarang tax ng mga POGO ay piso na nawawala sa bayan. Kaya pati ang taong bayan ay binudol din ng PAGCOR,” Gatchalian ended.