The House Committee on Bases Conversion resolved to subpoena the books of Sobrepena-led companies, including the Camp John Hay Development Corporation (CJHDevco), during a hearing held Wednesday to investigate the Sobrepenas’ questionable business practices and unpaid debts to government.

The committee, chaired by Kalinga Rep. Manual Agyao, approved the motion of Ilocos Sur Rep. Eric Singson, to subpoena the financial records of CJHDevco and all related Sobrepena companies and to conduct an independent audit of these companies.

CJHDevco currently owes a whopping P3 billion in unpaid lease rentals for leasing a portion of government property in the John Hay Special Economic Zone (JHSEZ).

The Baguio City local government will receive P750 million if the Bases Conversion Development Authority (BCDA), the government body that governs the JHSEZ, is able to collect the unpaid lease rentals of the delinquent lessee.

CJHDevco is owned and managed by Fil-Estate Corporation, chaired by Robert John Sobrepena, who also owns and manages the College Assurance Plan (CAP), the pre-need company known to have defaulted on its obligations to plan holders, and the Metro Rail Transit Development Corporation (MRTDevco), which currently owes the Department of Transportation and Communications (DOTC) more than P1 billion.

“CJHDevco’s debts places the government and the city of Baguio in a very disadvantageous position,” Singson stated, as he moved for the subpoena of financial documents of CJHDevco. The John Hay lessee has not filed their financial statements with the Securities and Exchange Commission (SEC) since 2008.

CJHDevco claimed losses while operating in the JHSEZ, and cited these as reasons for defaulting in their payment. The BCDA however revealed that CJHDevco has been declaring dividends while defaulting on their payments to government.

“They have not disclosed their books to us,” says BCDA president and chief executive officer Arnel Casanova, adding “At the heart of this is transparency. We want a private sector partner who we can trust and who is transparent to the public. CJHDevco has been claiming losses without presenting proof and without stating the billions of revenues it generated as well.”

CJHDevco has claimed losses in business opportunities due to the ruling of the Supreme Court ruling nullifying tax incentives in the JHSEZ in 2003. CJHDevco also cited as reason for non-payment, the delay in the processing of their permits by the One-Stop Action Center.

BCDA refuted such claim because the ruling was already cured when BCDA actively lobbied in Congress, resulting in the signing of RA 9399 and RA 9400, two laws that granted tax amnesty and restored the tax incentives to JHSEZ locators. Hence, CJHDevco did not suffer any damages as it never paid any tax.

Casanova also said that the reason for the non-issuance of the permits to CJHDevco was a result of their own neglect, “They have not filed their income tax return and submitted financial statements to the Securities and Exchange Commission (SEC) since 2008,” Casanova said, adding “as a government agency, it is our policy to help enforce government laws. We require submission of income tax returns.”

Baguio Rep. Bernardo Vergara moved for the creation of a technical working group (TWG) to address the concerns of both parties. The TWG was created with the provision of issuing a subpoena to all financial documents to CJHDevco and its affiliated companies to shed light on their business practices.