The state-owned Bases Conversion and Development Authority (BCDA) filed today before the Department of Justice (DOJ)  52 counts of malversation against the Board of Directors and officials of Camp John Hay Development Corporation (CJHDevCo) and its subsidiary, Camp John Hay Hotel Corporation (CJH Hotels), for the latter’s refusal to return 26 BCDA-owned hotel units located in Camp John Hay Manor and Camp John Hay Suites, Baguio City, as well as to give BCDA an accounting of the revenues earned by CJHDevCo and CJH Hotels from the operations of the 26 rooms.

The 22-page complaint stated that the CJHDevCo directors and officers, even after the lawful demand of  the BCDA, refused to return the public properties  to the government. These properties are 16 units of the CJH Manor hotel and 10 units of  the CJH Suites Hotel which have a total value of P121 Million.

The complaint further stated that CJHDevCo continues to earn from these units but refused to provide the liquidation of public funds—revenues that it earned from the use and lease of the 26 units.

Prior to filing the complaint, BCDA President Arnel Paciano Casanova demanded the return of these hotel units to the government, stating that CJHDevCo has been “holding, managing, and operating [BCDA] units from 2008 to the present and have been profiting there from without giving [BCDA] a proper accounting and remittances.”

CJHDevCo has been the lessee over the BCDA administered property Camp John Hay in Baguio City for a period of 25 years, renewable for another 25 years, commencing on October 19, 1996.   

In 2008, CJHDevCo gave the title of the 26 hotel rooms to government as partial payment of CJHDevCo’s unpaid lease rentals amounting to P2.6 Billion. 

For its part, BCDA never signed the leaseback agreement over the units as the term of the leaseback exceeded the term of CJHDevCo’s lease over Camp John Hay, which is only for 25 years from October 19, 1996, and renewable for another 25 years.

In its demand for return of the units and liquidation of revenues, Casanova stated that: “The leaseback arrangement is even made legally questionable with the findings of the Securities and Exchange Commission (SEC) En Banc in its recent Order dated 7 June 2012, … stating that CJH Development Corporation and CJH Suites are engaged in the business of selling unregistered securities in the form of an investment contract denominated as “Leaseback Agreement” for the “The Manor” and “The Suites” hotels in violation of Section 8 of the Securities Regulation Code (SRC).”

Said  Casanova: “We refuse to subject the government’s properties to an investment arrangement which does not comply with the law and does not provide government with any protection whatsoever.”