VACC files plunder raps vs. Trade Sec. Lopez, 10 others

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Metro Manila (CNN Philippines, February 8) — A group of anti-corruption advocates filed charges of plunder, technical smuggling, and estafa against Trade Secretary Ramon Lopez and 10 others including three officials of South Korean car maker Hyundai over more than a billion pesos in tax incentive.

In a complaint filed on Thursday, Volunteers Against Crime and Corruption (VACC) lawyer Ferdinand Topacio said Lopez, as chairman of the Board of Investments (BOI), unjustly favored Hyundai Asia Resources, Inc. (HARI).

"Respondents colluded with one another to avail and enjoy certain fiscal benefits in the form of preferential tax rates and customs duties to the detriment and prejudice of the Republic of the Philippines," the VACC complaint read.

The VACC said Lopez approved the application of Hyundai to be part of the motor vehicle development program (MVDP), even if the company has yet to fully comply with requirements.

The MVDP aims to enhance the country's capability to be produce completely built-up units for local and foreign markets.

The program allows companies to pay 1 percent preferential tariff rate for the import of completely knocked down units, to be assembled in the country.

However, VACC said an ocular inspection of HARI's Laguna manufacturing plant in February 2017 showed completely built-up Hyundai EON and H350 units, which has a tariff rate of 30 percent.

"There were no painting and welding processes for its assembly operations, and only the installation of engine, tires and batteries and quality testing/inspection are being undertaken within the facility. This indicates absence of basic assembly processes," the complaint read.

In May 2017, the government canceled HARI's registration as a participant in the MVDP and ordered the refund of the waived value added tax and customs duty worth P1.1 billion.

Lopez, in a message to reporters, said he does not know where the complaint is coming from.

"(The BOI) were the ones who investigated and suspended their MVDP license. And asked for the collection of what's due to the government. We just did our job," Lopez said.

Aside from Lopez, respondents include Korean nationals and Hyundai Motor Company (HMC) officials Mong-Koo Chung, chairman and co-chief executive officer (CEO), Won-Hee Lee, president and co-CEO, and Yong Suk Lee, president of HMC's Asia and Pacific regional headquarters.

Six other HARI officials and a customs broker were also included in the complaint.

The VACC filed the complaint with the Department of Justice, saying they trust the agency more than the Ombudsman, which has jurisdiction over criminal and administrative complaints against public officials.

The BOI's legal department withheld comment pending receipt of the complaint.

CNN Philippines is trying to reach HARI for comment.