DAR asks SC to clarify Luisita special audit

MANILA, Philippines - The Department of Agrarian Reform (DAR) is asking the Supreme Court (SC) to clarify various issues arising from the special audit of the pertinent financial records of the Hacienda Luisita management that the tribunal has ordered.

The motion, filed through the Office of the Solicitor General, was prompted by the recent impasse in the selection of an accounting firm that will conduct the special audit.

According to the DAR, there has been a disagreement among the parties in the Hacienda Luisita case on which firm should be selected.

DAR Secretary Virgilio de los Reyes said the special audit of the Hacienda Luisita Inc. (HLI) and Centenary Holdings Inc. (CHI), with respect to the gross proceeds arising from the conversion of two lots with an area of 500 hectares and the expropriation of a portion for the Subic-Clark-Tarlac Expresswway (SCTEX), cannot proceed unless all the parties involved agree on the accounting firm that would undertake this task.

“We wish to put on record that it is the disagreement among the parties concerned, and not the DAR, that is the cause of the delay in the audit process,” De los Reyes said.

He noted that the SC, in its order, stated that the DAR “is ordered to engage the services of a reputable accounting firm approved by the parties” to audit the books of HLI and CHI to determine if the P1,330,511,500 proceeds of the sale of the three lots “were actually used or spent for legitimate corporate expenses. Any unspent or unused balance and any disallowed expenditures, as determined by the audit, shall be distributed to the 6,296 original FWBs (farmworker-beneficiaries).”

Based on the SC ruling, DAR Undersecretary for Legal Affairs Anthony Parungao said DAR’s role in the audit process is limited to facilitating the process that will lead to the selection of an accounting firm acceptable to and approved by all the parties involved in the Hacienda Luisita case.

The parties concerned, according to Parungao, include HLI and the various farmers’ organizations representing the farm workers of the country’s biggest sugar estate.

In particular, the DAR sought clarification on whether the phrase “approved by the parties” meant unanimity or a mere majority vote, whether HLI can be excluded from the process, whether the DAR’s role is limited to facilitating the process of selection and that it has no authority to decide or act on “motions” submitted by any of the parties, as well as on the nature and extent of the audit and its period.

The DAR also requested that the prescribed arrangement for the special purpose audit be revisited and modified, to ensure an expeditious and effective process of selecting the accounting firm.

Parungao recalled that in the course of the meetings organized by DAR, three auditing firms have signified their intention to perform the special purpose audit – Reyes, Tacandong & Co.; Ocampo, Mendoza, Leung, Lim (OMLL); and San Agustin & Co. (MS & Co.)

The Alyansa ng Manggagawang Bukid sa Asyenda Luisita (Ambala) earlier had presented its motion to disqualify the Reyes, Tacandong & Co., alleging that it is associated with the Cojuangco family.

Ambala also later wanted to disqualify MS & Co. and reportedly endorsed OMLL as its choice.

But the parties concerned have yet to reach a consensus. “Despite the series of meetings and consultations, the parties concerned could not agree on what accounting firm the DAR should engage to audit the pertinent financial records of HLI and CHI,” De los Reyes said.   – With Edu Punay