Palace defends filing of raps vs Piatco

MANILA, Philippines - Malacañang said yesterday the Department of Justice’s decision to file Anti-Dummy Law charges against the Philippine International Air Terminals Co. Inc. (Piatco) and its German investor, Fraport AG was a way to show that corruption and irregularities would not be tolerated even among investors.

“You have legal issues concerning what happened. We want to make people who were responsible for this be accountable whether investor or not. Just because they are investors doesn’t mean they can violate the law,” deputy presidential spokesperson Abigail Valte said.

Piatco scored the Aquino government for using the anti-dummy law as a “weapon of terror” that it could use “against our friendly foreign investors.”

It also said government lawyers in cahoots with favored business personalities were behind the charges against Piatco and Fraport officials.

Violations of the 40 percent cap on foreign ownership in Philippine corporations were set by the Constitution, Foreign Investments Act and the Anti-Dummy Law.

Piatco’s German partner, Fraport, has admitted at the International Center for Settlement based in Washington that its aggregate investments in Piatco and the cascade companies reached over 61 percent. But it stressed that this should not be considered as a violation of the Anti-Dummy Law since the Philippines allowed a liberal computation of foreign investments.

Fraport claimed its investment in Piatco itself did not exceed 40 percent.

However, a tribunal that heard the case filed by Fraport has ruled in 2007 that Fraport still violated the Anti-Dummy Law since the Filipino and German firms executed secret shareholder agreements that assigned to Fraport the operational, financial and managerial control of Ninoy Aquino International Airport Terminal 3.

In December 2010, a separate tribunal annulled the decision of the first tribunal citing Fraport’s lack of opportunity to present evidence to refute the basis of the violation.

The Philippines has won an arbitration case in Singapore versus Piatco but an expropriation proceeding is still pending before the Pasay City regional trial court to determine just compensation for the builders of NAIA 3.