Congress probes John Hay developer over P850M debt

BAGUIO CITY – Rep. Nicasio Aliping Jr. Thursday called for the subpoena of Camp John Hay Development Corporation (CJHDevCo) officials before the House Special Committee on Bases Conversion, amid the government’s ongoing multi-billion case against the Robert Sobrepeña-led company.

CJHDevCo has been charged with owing the government P3.4 billion in lease payments in the John Hay Special Economic Zone (JHSEZ).

Out of this amount, P850 million is reportedly owed to Baguio City, as the local government has a 25% share in the rental payments.

Government records show that CJHDevCo, which had acquired the lease of 247 hectares of Camp John Hay in 1996, repeatedly defaulted on its rental obligations, despite constant demands of payment from the government and multiple restructurings of the lease agreement.

This resulted in the ballooning of CJHDevCo’s debt, and prompted the government to terminate the lease agreement in 2012.

Aside from the subpoena, Aliping also called for CJHDevCo’s submission of its financial statements from 1996 to present, as well as its contracts with locators and concessionaires, as the company purportedly has continued to earn from its operations despite its non-payment of rentals.

Aliping said “the interest of the city is very much prejudiced. Equity demands that CJHDevCo must pay the rentals or the shares to the city.”

“The staggering amount that CJHDevCo owes the city and its people could very well have been used for crucial city projects,” he added. “The people of Baguio are ultimately paying for CJHDevCo’s refusal to pay the government.”

The Baguio lawmaker had already been championing the increase of funding for various city projects, including road rehabilitation, livelihood programs and other grassroots initiatives.

Several organizations have already been given livelihood funds worth more than P1 million through a special program spearheaded by Aliping in partnership with the Department of Labor and Employment and the Department of Trade and Industry.

Meanwhile, Bases Conversion and Development Authority

BCDA president Arnel Casanova informed the House committee on bases conversion that the unpaid rentals of CJHDC allegedly accumulated since 1996, when the lease agreement between the developer and the government was signed.

He said CJHDC had been defaulting on its lease payments since 1997.

He said the government agreed three times to restructure the accumulated debt but still, the developer defaulted, claiming it was incurring losses.

“However, we have belatedly discovered from the Securities and Exchange Commission that CJHDC declared dividends to its shareholders in 1998, 1999 and 2000. This belies their claim that they incurred losses during those years,” he said.

He added that in May 2012, the government was forced to terminate its lease agreement with the developer and tried to take over Camp John Hay, but Executive Judge IluminadaCabato of the Baguio City regional trial court prevented it from doing so.

Aliping Jr. decried CJHDC’s alleged refusal to let BCDA take over the property despite its failure to pay rentals.

Other committee members wondered why the government seems helpless in recovering a valuable asset and allowing rentals to pile up since 1996, or over a period of 18 years.

No officer of CJHDC showed up in the hearing. Company officials wrote the committee that they could not attend because the issue is pending in court.

On motion of Aliping, the committee voted to subpoena CJHDC officials to attend its next hearing.

It also required the company to submit its annual financial statements since 1996 up to last year, and all lease agreements with Camp John Hay locators, also since 1996.