Absurd resolution

A Cabinet undersecretary is being closely watched by his superior for allegedly pulling a fast one when the secretary was on leave. 

Observers say that his action was so severe it made a mockery of the Philippine justice system and put the country in a bad light in the eyes of foreign investors.

Sources said Justice undersecretary Jose Vicente Salazar issued a “shocking” and “absurd” resolution on June 21, 2012, when Justice Secretary Leila de Lima was on leave which recommended the filing of criminal charges against the top officials of Thailand-based manufacturer of Red Bull energy drink, for alleged violation of intellectual property rights (IPR).

The Thai firm, T.C. Pharmaceutical Industries Company Ltd. (TCPI) was so shocked by the resolution, wonderous how it could be remotely said to be in violation of the said law when they are owners of the intellectual property right the Red Bull brand.

The Cabinet undersecretary ordered, of all places, the Legazpi City prosecutor to file criminal charges against the Thai company which is one of the largest companies in the Southeast Asian region.

What in the world will make a Cabinet official risk not only his position but also the country’s reputation to issue such an absurd resolution? How true is it that the influential owners of the defunct Energy Food and Drinks Inc. (EFDI) or more popularly known as the Chua brothers – George, Renato and Jaime – had something to do with it?

The Thai company terminated its contract with the Chua brothers as early as October 2008, after the foreign investor lodged an estafa case involving P150 million against them for violation of trust receipts thru Bangkok Bank. As a result of the termination of the contract, EFDI has already ceased business operations since Dec. 31, 2009, as shown by its manifestation filed before the court. 

Before the termination of the contract, the Chua brothers lost their other businesses – Photokina Marketing Corp. and Dreyers Ice Cream – which went bankrupt allegedly because of mismanagement.

Photokina sank after being involved in a controversial poll automation deal brokered by Benjamin Abalos, a close friend of the Chua family a decade ago. Amid heavy public scrutiny for awarding an overpriced P6.5-billion contract to Photokina, the Commission on Election was forced to scrap the deal, depriving the Chua brothers of what would have been a huge windfall.

The fortunes of the Chua brothers took a turn for the worse with the termination of the contract between T.C. Pharmaceutical and EFDI in 2008 that led to a series of court battles, with the Chuas filing cases all over the country including on Legazpi City, against the Thai executives who have not even heard of those places in the first place.

Just last July 31, the Court of Appeals, which is handling a similar case, affirmed its ruling that allowed T.C. Pharmaceutical to junk its deal with the Chua brothers and choose its own distributor in the Philippines.

An associate justice of the appellate court, who issued the first ruling in favor of T.C. Pharmaceutical, was even irked by the Chua brothers’ legal maneuverings and decided to inhibit from the case. Associate Justice Amy Lazaro-Javier noted EFDI’s inclination “to inhibit every magistrate who does not see things its way.” The Chua brothers, however, found a new ally in DOJ undersecretary Salazar.

At the moment, sources said the foreign business community is waiting how Secretary de Lima will deal with Salazar.

T.C. Pharmaceutical is worried that the resolution may besmirch not only the reputation of the Red Bull brand, but also the image of the Philippines.

Foreign investors are particularly worried that the resolution may set a bad precedent in the way businesses are conducted in the Philippines. At the very least, the resolution sends a wrong signal to foreign investors and runs counter to the Aquino administration’s “Matuwid na Daan” anti-corruption program.

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