By Kristine Joy V. Patag

Gaming tycoon Jack Lam faces anti-dummy complaint

Posted on December 24, 2016

AN anti-crime group filed on Friday an anti-dummy complaint against Chinese gaming tycoon Jack Lam before the Department of Justice (DoJ).

The Volunteers Against Crime and Corruption (VACC) are accusing Mr. Lam of using dummy accounts in the ownership of Fort Ilocandia Resort Hotel in Laoag, Ilocos Norte.

Besides Mr. Lam, others named in the criminal complaint for alleged violation of the anti-dummy law under section 2-A of Commonwealth Act No. 108, as amended by Presidential Decree No. 715, are former Fort Ilocandia officials:

Rosanno P. Nisce, president; Siu Wah Chung, board of directors chairman; Edgar Lim, treasurer and director; and Jose Roberyo L. Mumuic, secretary and director.

The eight-page complaint read: “Through corporate layering, Fort Ilocandia through its dummy companies, and its Directors and Officers are able to exercise, enjoy, use and exploit real property in the Philippines contrary to law.”

The complaint, the latest in an ongoing controversy involving Mr. Lam, was submitted by VACC Chairman Dante LA. Jimenez, with the group’s spokesperson, Arsenio “Boy” Evangelista Jr., and legal counsel Ferdinand S. Topacio.

According to the VACC, Fort Ilocandia’s stockholdings are as follows: 59% to Ilocandia Holdings Corporation; 39% -- Intellectual Group Ltd. (IGL) (foreign); less than 1% or one share to Jack Lam.

IGL, according to the VACC, is a “corporation duly organized and existing under the laws of the British Virgin Islands.”

The VACC, however, noted that the stockholdings of Ilocandia Holdings Corporation are composed of: 59% Sevenseas Holding and 39% Corpsmart Ltd. (foreign).

“The corporate structure of the above corporations, despite being seemingly compliant with the Philippine laws, warrants a deeper investigation, as to their real foreign equities and those of their subsidiaries and /or affiliates,” the VACC pointed out.

Under the Securities and Exchange Commission (SEC) Memorandum Circular No. 8, Series of 2013, Filipino nationals should own 60% of a corporation “engaged in nationalized or partly nationalized activities.”

The complainant also seeks the nullification of the Asset Purchase Agreement dated Sept. 9, 2000 entered into by Fort Ilocandia with Grand Ilocandia and the Waterfront Philippines Inc. (WPI).

Grand Ilocandia was the original operator of Fort Ilocandia Resort and Hotel when it entered the agreement.

The VACC noted that Mr. Lam once represented the foreign company IGL, when he signed a Memorandum of Understanding, on behalf of IGL, on May 6, 2000. The said memorandum allowed the grant of loan of P150 million to Waterfront Philippines Inc.

Then, in entering the assailed Asset Purchase Agreement on Sept. 9, 2006, Fort Ilocandia acted as “assignee of IGL.”

As stipulated under the said agreement, Fort Ilocandia was able to acquire from Grand Ilocandia real properties and assets where the Fort Ilocandia Hotel and Resort is situated, among other assets.

"There is a violation of the Anti-Dummy Law, when a qualified Filipino citizen or national allows a foreign citizen or non-qualified person to enjoy rights, privileges, property or business, the exercise of which is limited to Filipino citizens," the complaint read.

Mr. Lam has been making headlines recently following the Nov. 24 raid led by the Bureau of Immigration (BI) at the Fontana Leisure Parks and Casino in Clark, which he operates.

The raid led to the arrest of 1,316 Chinese nationals allegedly working illegally in an online gambling operation. An extortion controversy involving BI officials and Mr. Lam is now under investigation.

Mr. Lam is head of Hong Kong-listed Jimei International, which issued a statement On Dec. 6 saying that Mr. Lam’s gaming operations in the Philippines were personally owned and not part of the group’s business.

Mr. Lam, who used to bring high rollers to Macau’s top casinos including Sands China and Wynn Macau, has faded from prominence over the past few years as Beijing’s crackdown on corruption has crippled so-called junket operations.

At the same time, his operations in the Philippines have grown, including a rise in Chinese nationals gambling online at his gaming site.

Philippine authorities have since closed Fontana and the Fort Ilocandia Resort, which also has a casino.

Meanwhile, President Rodrigo R. Duterte released a new round of lashing against Mr. Lam as he admitted that he was ready to “invent” charges when he previously ordered to have the Chinese national arrested.

“If you are a lawbreaker, so I am,” Mr. Duterte said on Thursday in his impromptu speech during the ceremonial signing of the 2017 budget in Malacañan.

The President narrated that as he was reading newspaper reports in the evening, as part of his daily routine, he saw that Mr. Lam “was talking to the people, to the press, as if everybody was in his pocket. That's why I ordered his arrest early (next) morning.”

Nabasa ko. Kaya tinawagan ko ang NBI, sabi ko (I read it. That’s why I called the National Bureau of Investigation, I said) arrest the idiot,” Mr. Duterte said.

“So what is the charge? Never mind the charge. I will invent. Just arrest him. ‘Sir, but warrant?’ No warrant-warrant. Sabihin mo ang warrant mo si (Tell him your warrant is) Duterte, mayor. I will think of one when he is in front of me,” he continued.

Mr. Duterte was then looking at bribery and economic sabotage charges against Mr. Lam for allegedly attempting to bribe the Justice secretary and for failure to pay the right taxes.

Mr. Duterte later said he no longer wants Mr. Lam arrested after the latter sent feelers to the government that he will return to the Philippines to “settle his obligations”.

Mr. Lam reportedly left the country on Nov. 29 based on travel records from the BI.

Among Mr. Lam’s obligations, according to the chief executive, is paying 10% of gaming revenue to the government just like other casinos, rather than the 1% he used to give through an “original contract” with the Philippine Amusement and Gaming Corp. -- with a report from Ian Nicolas P. Cigaral and Reuters