Duty Free manager stays

Tourism Secretary Joseph Durano has issued a memorandum to Duty Free Philippines General Manager Michael Kho and Philippine Tourism Authority (PTA) General Manager Robert Dean Barbers directing both to maintain the status quo on the issue of DFP’s leadership.

In a memorandum dated yesterday, Durano ordered both parties to continue performing their functions until he has decided on the order of preventive suspension issued by Barbers last Sept. 14 to Kho, arising from an administrative case filed by a DFP employee who himself is now serving a 60-day suspension after having stolen the cell phone of a DFP shopper.

In effect, Durano affirmed the order setting aside Barbers’ order issued last week by the department’s officer-in-charge in his absence, DOT Undersecretary Oscar Palabyab.

Durano’s memo to both Kho and Barbers read:

"Without deciding on the merits of the issues presented, both parties are directed to maintain the status quo prior to the issuance of the order of preventive suspension on the GM, DFP issued by the GM, PTA last 14 Septembers 2005.

"Until such time that the undersigned has issued a decision, both parties shall continue to perform their functions and responsibilities to ensure the efficient and smooth operations of their respective agencies."

Members of the PTA Board also condemned the aborted suspension try of Kho who they said had done a "sterling job" in nursing the former world’s fourth-largest duty free operator back to financial health and profitability after five straight years of heavy losses before he assumed office in 2001.

Earlier, Barbers in his press statement said the suspension order arose from an administrative case filed by DFP Employees Association president Dennis Mallari who alleged that Kho had entered into concession accords with DFP suppliers beyond the one-year limit set by government.

However, Kho had informed the PTA that DFP’s supply accords were in the nature of consignment agreements and not concessions, where DFP continues to handle the importation, marketing, sale and warehousing of these goods. Approved by the PTA Board chaired by the DOT Secretary himself, these accords were also based on long-standing supply arrangements begun since the inception of DFP during the Aquino administration.

Kho also revealed that Mallari had a personal axe to grind since he was suspended for 60 days by a DFP disciplinary committee after a customer filed a complaint after Mallari apparently stole his cell phone, an incident captured on the store’s security cameras.

Some 300 DFP employees have also signed a manifesto of support for Kho and his management, while DFPEA members are also moving to unseat Mallari after he was found guilty of moral turpitude.

Members of PTA’s five-man board also raised issue with Barbers’ plan to suspend Kho without passing this through board approval, since they said under the PTA’s own charter Presidential Decree 564, the PTA board has the sole power to discipline the agency’s senior officials.

PTA board member Francisco Legaspi, in a letter sent to Durano last Sept. 22, said he questioned "the seeming underhanded manner in which Mr. Kho was suspended by (Barbers). Based on Sec. 22 (c) of the PTA charter, the Board of Directors has the power and authority to appoint, discipline and remove… the PTA’s key personnel. The Board has not been presented with any proposed suspension of Mr. Kho, nor has it acted on any such suspension."

Legaspi also praised Kho for having turned around DFP which had suffered P2.1 billion in losses from 1997 to 2001. After Kho assumed at DFP in 2001, the duty free operator turned a P403 million profit reversing its five-year losing trend. During Kho’s term, DFP has netted a cumulative P2.5 billion in profits as of last year.