MALICIOUS MOVE? Lawyer seeks probe into PECO offshore accounts

A lawyer will ask the Anti-Money Laundering Council (AMLC) to investigate offshore accounts linked to the owners of Panay Electric Co. (PECO), a move which the latter labelled as malicious.

Lawyer Zafiro Lauron was referring to the reports by the International Consortium of Investigative Journalists (ICIJ) on offshore accounts of politicians, billionaires, and other personalities.

“I will pursue this case on behalf of Ilonggos who suffered from paying electricity bills almost double of those being paid by people in Metro Manila,” Lauron said.

In a statement, PECO said Lauron’s move is grounded on malicious accusations and a “rehashed issue that had long been disproven.”

“Mr. Lauron claims that PECO and the Cacho family have investments in British Virgin Islands (BVI) which had supposedly recently been leaked. Said investments, he implies, is a money laundering scheme and should thus be investigated by the Anti-Money Laundering Council. Worse, Mr. Lauron, insinuates that the investments were the result of the overcharging of Iloilo consumers by PECO. Neither PECO nor the Cacho family has any current BVI investments. The financial records of the company and the Cacho family are open for scrutiny by the appropriate authorities. Whatever investments the Company or family may have are all above-board and compliant with law,” PECO said.

PECO challenged Lauron to file appropriate cases instead of issuing damaging statements to the media.

“Verily, if Mr. Lauron had any legitimate complaint, he would have sought the appropriate remedies with the appropriate forum rather than issue libelous statements to the media. Indeed, his statements are calculated to tarnish the hard-earned goodwill of PECO and the Cacho family who have been serving the consumers of Iloilo for nearly 100 years through war, catastrophes, changes in administration, and upheavals. Integrity is among their core values and any allegation of dishonest or improper conduct will not be taken lightly,” the firm added.

In a phone interview, Lauron said he did not categorically say that PECO and the Cachos committed crimes by mere ownership of offshore bank accounts.

But Lauron did note that some offshore bank accounts in so-called tax havens have questionable backgrounds and transactions.

“What I am asking the AMLC is to look into these accounts. If there is ground to investigate further, so be it. If not, then they can always clear the other party. If PECO says that their ownership of the accounts has been disproven, they can always present their proof in the investigation,” he added.

Lauron said his move is part of his advocacy for better services to the people, especially in power distribution since he is also an Ilonggo and businessman.

He also denied that he was prodded by PECO’s rival in the power distribution services, MORE Electric and Power Corp.

“I don’t care about their dispute which is the purview of the courts. I don’t know what they are doing. I only care for the services to the people. And the people deserve to know,” he added.

As to PECO’s accusations that he issued libelous statements to the media, Lauron said the Cacho-led firm was involved in a business imbued with public interest.

“I will face whatever lawsuit they will file if ever, but they should not shoot the messenger. These accounts being attributed to them existed when they were still running power distribution which is imbued with public interest. The public has the right to know if they really own these accounts and what are these for,” he added.

 

ACCOUNTS

The offshore bank accounts being attributed to the Cacho family and PECO are among those listed in the findings of the ICIJ, a global network of more than 190 investigative journalists in more than 65 countries who collaborate on in-depth investigative stories.

Its website https://www.icij.org/ is a portal for all four batches of documents pertaining to alleged secret registration of paper companies in purported tax havens all around the world.

But apart from the list, the ICIJ has not run any story that highlighted questionable transactions involving the alleged PECO or Cacho offshore accounts.

The Offshore Leaks Papers comprised the first batch of secret papers in a computer drive that arrived in the group’s headquarters in London in 2013. The drive contained four large databases plus half a million text, PDF, spreadsheet, image, and web files.

Analysis by ICIJ’s data experts showed that the data originated in 10 offshore jurisdictions, including the British Virgin Islands, the Cook Islands and Singapore.  It included details of more than 122,000 offshore companies or trusts, nearly 12,000 intermediaries (agents or “introducers”), and about 130,000 records on the people and agents who run, own, benefit from or hide behind offshore companies.

According to the ICIJ, among the documents found in the data leaked to the group called the Offshore Leaks Papers (https://offshoreleaks.icij.org/) were thousands of documents listing paper companies that were registered in the British Virgin Islands in Bahamas by Portcullis TrustNet Fund Services Ltd., a company owned by Singapore-based Portcullis Services Pte. Limited.

Government officials and their families and associates in China, Azerbaijan, Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and other countries have been found to have “embraced the use of covert companies and bank accounts,” according to the ICIJ.

“The people identified in ICIJ’s analysis of the data are shareholders, directors, secretaries and nominees of companies and trustees, ‘settlors’ or ‘protectors’ of offshore trusts, as well as power-of-attorney holders who direct the actions of third parties. Many of the structures are designed to conceal the true ownership and control of assets placed offshore. Their identified addresses are spread across over more than 170 countries and territories,” the ICIJ said.

 

‘PAPER COMPANIES’

Based on its findings, the ICIJ unearthed papers showing that PECO and purported members of the Cacho family allegedly registered at least three companies in the British Virgin Islands.

The ICIJ web page https://offshoreleaks.icij.org/nodes/293428 showed that a certain Luis Miguel Cacho registered a company called the Costa Group Investments Ltd., an entity registered with the British Virgin Islands in the Bahamas on April 11, 2000, with an address listed as Portcullis Trustnet Chambers, PO Box 3444 Road Town Tortola, BRITISH VIRGIN ISLANDS.

Costa Group’s papers listed as members of its Board of Directors a certain Luis Miguel Ayesa Cacho, who is also corporate secretary; a certain Jose Maria E. Cacho, and a certain William Michael Valtos Jr. Portcullis Trustnet (BVI or British Virgin Islands) Ltd. as keeper of records and register.

According to the professional website LinkedIn.com, Valtos is currently Group President of the Financial Services Group of the ICCP Group, a diversified conglomerate based in the Philippines. Its financial services division includes the operating units like investment banking in the Philippines, venture capital and private equity management in the United States and Asia, and asset management Singapore, where Portcullis Services is based.

Based on ICIJ’s website, the journalists also unearthed papers that showed PECO also allegedly set up two other companies in the British Virgin Islands with the help of Portcullis Trustnet (BVI) and Valtos-Prime Rose Technology Ltd. and Mega International Services Ltd.

Prime Rose Technology (https://offshoreleaks.icij.org/nodes/132989) was registered in the British Virgin Islands on October 11, 2000, with Jose Maria Cacho, PECO, and Valtos listed as shareholders. Cacho and Valtos were also indicated as directors of the firm.

Mega International Services, on the other hand, was set up a month earlier on Sept. 12, 2000, with Jose Maria E. Cacho, JMEC Development Corp. and Valtos as shareholders, and Jose Maria Cacho and Valtos as directors. PortCullis Trustnet also served as keeper of records and registry.

JMEC Development Corp. is a company registered in the Philippines that handles business management consultancy and real estate sale and development in Iloilo City, with address as 168 General Luna St, Iloilo City Proper, Iloilo City, 5000 Iloilo.

 

ICIJ PROBE

According to the ICIJ, “the world’s mega-rich use complex offshore structures to own mansions, yachts, art masterpieces and other assets, gaining tax advantages and anonymity not available to average people.”

It claimed that “many of the world’s top’s banks – including UBS, Credit Suisse and Deutsche Bank – have aggressively worked to provide their customers with secrecy-cloaked companies in the British Virgin Islands and other offshore hideaways.”

“A well-paid industry of accountants, middlemen and other operatives has helped offshore patrons shroud their identities and business interests, providing shelter in many cases to money laundering or other misconduct,” the journalists’ group said.

“Ponzi schemers and other large-scale fraudsters routinely use offshore havens to pull off their shell games and move their ill-gotten gains,” the ICIJ noted.

It also added that “ While many of the activities carried out through offshore entities are perfectly legal, extensive reporting by ICIJ and its media partners for more than five years has shown that the anonymity granted by the offshore economy facilitates money laundering, tax evasion, fraud and other crimes. Even when it’s legal, transparency advocates argue that the use of an alternative, parallel economy undermines democracy because it benefits a few at the expense of the majority.”

In the Philippines, the ICIJ has as members investigative journalists Roel Landingin, Maria Ressa, US-based journalism school dean Sheila Coronel and multi-awarded journalist and investigative journalist Marites Danguilan Vitug.