Tax expert: Pharmally's unaccounted goods could be 'ghost deliveries'

Job Manahan and Sherrie Ann Torres, ABS-CBN News

Posted at Dec 03 2021 08:53 PM

Bureau of Jail Management and Penology officers from the Pasay City Jail escort Pharmally Pharmaceutical Corp. executives Mohit Dargani and Linconn Ong to the committee room upon arriving at the Senate. Friday, December 3, 2021. Senate PRIB handout
Bureau of Jail Management and Penology officers from the Pasay City Jail escort Pharmally Pharmaceutical Corp. executives Mohit Dargani and Linconn Ong to the committee room upon arriving at the Senate. Friday, December 3, 2021. Senate PRIB handout

MANILA - Pharmally Pharmaceutical Corp.'s billions of pesos worth of unaccounted purchases could possibly be "ghost deliveries", a tax expert told the Senate's investigative panel on Friday. 

Tax expert Raymond Abrea broke down the P3.4 billion undeclared purchases announced to the Bureau of Internal Revenue (BIR) out of the P7.2 billion audited financial statement. 

The remaining P3.8 billion, categorized to the summary list of purchases and importation, are as follows: 

  • P2.9 billion – purchases from Evermore
  • P273 million - purchases from Acme Pinnacle
  • P613 million - worth of summary list of importation

Abrea noted that there was also an unrelated P10.9-million luxury car in Pharmally officials' purchases, even if they are not selling vehicles.

"Kapag sinabi naman pong urelated, hindi naman po kasi sila nagbebenta ng kotse so hindi po imbentaryo yung luxury car pero dahil kinlaim nila for VAT purposes, nakasama po siya sa summary list of purchases," the expert explained. 

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He added that suppliers Tigerphil Marketing and Royal Cargo were still not in the summary list of purchases. 

This means, he said, that there is no basis yet on the P3.4 billion worth of purchases based on the documents. 

"In short po yung P3.4 billion unsupported purchases, until now, based sa documents na sinubmit sa Senate and na-review po namin, wala pa rin po kaming makiatng basis kung saan po nanggaling [iyon]," according to Abrea. 

He said Royal Cargo’s transaction with Pharmally only started on April 22, 2020 with the initial supply involving two boxes of test kits delivered on July 8, 2020.

But there were no records that indicated the purchase of face masks, face shields, or personal protective equipment, Abrea said.

“Ibig sabihin po nung nagkaroon ng supply ng delivery, hindi pa po involved si Royal Cargo... at nung taxable year 2020, Mr. Chairman, 614 units lang po ang na-deliver ni Royal Cargo, at nanatili po yung 6,568 sa kanilang imbentaryo,” he explained.

“Nananatili pa rin pong unknown or unsupported yung purchases at yung delivery po nung mga cost of sales po na naka-report po sa audited financial statement,” he added.

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On the other hand, records from the Procurement Service of the Department of Budget and Management (PS-DBM) showed that while there were P8.8 billion worth of deliveries from Pharmally, there was supposedly no disclosure on what items were covered by the P4.4 billion worth of delivered masks and PPE. 

“Wala pa po si Royal Cargo dito. So walang warehouse, walang delivery records yung P4.4 billion base po sa mga dokumento na na-submit sa amin for review,” he said.

There was also some 27,043 or P2.3 billion worth of Pharmally-delivered test kits to PS-DBM from July to November last year, based on Abrea's assessment. 

Royal Cargo was already present that time, but only 614 units of test kits were delivered based on their records. 

"Ibig sabihin, nanatiling hindi pa rin po naging malinaw, undisclosed pa rin po, unknown pa rin po yung records ng warehousing at delivery ng mga facial mask, PPE at iba pang testing kits kung ang pagbabasehan po natin si royal cargo na wala rin po sa summary list of purchases ni pharmally based on BIR submissions," he said. 

This led to Senate Blue Ribbon Committee Chairman to ask whether the development means that there were no purchases at all or were only "ghost deliveries." 

Abrea said it is a possibility: "Wala po kaming na-review na records Mr. chairman," said Abrea.

"Will that be on the conclusion na naloko talaga ang bansa na may ghost deliveries kasi ayaw naman nilang magsalita. Lumalabas, pinapahanap natin yung libro… Would that be a correct conclusion?" Gordon asked. 

To which the tax expert responded: "Possible Mr. Chairman 'pag walang documents." 

Gordon then called on the Bureau of Internal Revenue to also investigate the issue.

PHARMALLY EXECUTIVES 

Abrea’s team also saw some missing links on the income capacity of Pharmally’s key personalities as against their total declared investments.

The following shareholders had the following details:

ACCUMULATED INCOME TOTAL INVESTMENT (2016 – 2020)

  • Yang Hong Ming (Michael Yang) - P1.584 million (2016); P52.125 million (2020) 
  • Rose Nono-Lin - P1.361 million (2016); P136.353 million (2020)
  • Mohit Dargani - No information (2016); P0.187 million (2020)
  • Linconn Ong - No information (2016); 0.100 million (2020)
  • Twinkle Dargani - No information (2016); 0.62 million (2020)

“Yung mga known personalities po, pag binangga namin yung declared income sa kanilang total investment undisclosed pa rin po, o hindi pa rin ma-determine o ma-establish yung kanilang financial capacity or source of income,” Abrea noted.

A previous Senate hearings detailed the luxury cars that Pharmally executives had after securing the deals with government. 

The executives also failed to properly pay their taxes, with some unable to file income tax returns in some years, according to BIR.

Per Land Transportation Office (LTO) records, Twinkle had a 2021 Lamborghini Urus registered under her name in December 2020, about 9 months since their first transaction with PS-DBM. That vehicle is worth P25 million.

Five months later, her brother Mohit got a 2021 Porsche 911 Turbo S registered under his name. The car cost P8.5 million.

The Senate is investigating Pharmally after records showed that the Department of Budget and Management's Procurement Service (PS-DBM) awarded billions of pesos worth of contracts to the company that only had less than a million pesos in paid-up capital.

Some senators earlier said the PS-DBM bought allegedly overpriced face masks and RT-PCR test kits from the company whose executives are accused of fraudulent schemes in Taiwan, instead of procuring from local suppliers that were selling cheaper items.

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