The issue of a luxury vehicle which was sold by Panay Electric Company (PECO) to its president and chief executive officer after losing its franchise is generating more questions amid claims by PECO’s law firm that the matter is “false and malicious.”
Earlier, Divina Law Office, counsel for PECO, said that the expenses for the purchase of the BMW car was never included in the capital expenditures of PECO but was charged as an administrative expense puts the external auditor of the former utility distributor in hot water.
“The records will clearly show that said purchase was an administrative expense that was charged to PECO’s own account. Contrary to the false claims being peddled to media outlets, the said expense NEVER became part of any of the amounts billed to consumers, as is PECO’s practice with its administrative expenditures. Therefore, it is an utter and malicious lie that the consumers were made to pay even a single centavo,” Divina Law said in a letter to this paper.
The lawyers who signed the Aug 4, 2020 letter were Nilo T. Divina, Estrella C. Elamparo, John Michael S. Galauran, Rhegine T. Peralta, Anna Camille C. Himala, and Ramon T. Conducto II, all of the Divina Law firm.
The law office confirmed that PECO did buy the BMW, but said it was a second-hand vehicle which was used by the government for the APEC Summit in 2015.
“Moreover, the expense was never included in PECO’s ERC (Energy Regulatory Commission)-approved capital expenditure. It will be noted that the Performance Based Rate Increase under the ERC Rules has been suspended since 2013 and PECO never applied for any emergency capex,” the lawyers claimed.
Power consumers, however, are saying otherwise.
Halley Alcarde, general manager of Western Visayas Transport Cooperative, who is an accountant by profession, underscored that “all administrative expenses are charged to consumers 100 percent, but a luxurious car can never be an administrative expense. It should be a capital expense.”
“Well, what PECO lawyers are saying might be true but something illegal because PECO’s 2015 financial statement showed that the company only purchased P747,000 worth of transportation equipment and obviously this cannot have included the P5-million BMW. And this strongly suggests that the initial information of recording the sale under distribution wires as reported by the media could be correct,” Alcarde added.
A renowned auditor in Iloilo City who requested anonymity argued that “If this is true, then the external auditor of PECO will have a big problem that might endanger his license to practice the profession for allowing an obvious capital expenditure to be recorded as an administrative expense.”
“PECO is creating more problems here because assuming we will take their statement hook, line and sinker then the external auditor will have a very big problem for clearly violating the generally accepted accounting standards,” the auditor noted.
“If this is so, then the financial statement submitted by PECO is no longer reliable because a capital expenditure should not be part of administrative expense,” he added.
The BMW controversy has reached the attention of various sectors in Iloilo and the transport sector toed the line by questioning the sale and calling for an investigation.
“Well, they (PECO) have to justify to the people so it must be investigated by the authorities. They have to prove that they have not wasted consumers’ money here or else they have to answer for it,” Alcarde was earlier quoted as saying.
Another transport leader, ICLAJODA President Raymundo “Boyet” Parcon questioned the timing of the sale emphasizing “why in the world that while PECO is embedded with legal issues regarding the continuity of its operations that it will time the sale of the company-owned luxury car to its own president. Just mind-boggling isn’t it? And one more thing, is PECO allowed by the ERC to own a luxury car? An investigation therefore must be in order.”
The comments of Alcarde and Parcon did not sit well with PECO’s lawyers as they claimed that the two transport leaders insinuated that PECO purchased a luxury BMW using consumers’ money.
“It is a bold-faced lie,” the lawyers hinted and challenged “those who claim irregularities in the BMW car deal should file complaints with the proper forum.”
“If these claims had any legal footing, they should have been brought to the proper forum instead of libelously ventilated to the media without any basis whatsoever. The recent barrage of lies to besmirch PECO’s reputation appears to be an orchestrated demolition job to paint PECO in a bad light,” the lawyers said in their letter.
