Conflict of interest ? COA says BCDA better off developing BGC lots than selling to Ayala-Campos
The Commission on Audit (COA) believes the Bases Conversion Development Authority (BCDA) made a wrong move when it sold rather than develop on its own the prime lots in Bonifacio Global City to the Ayala Land group in six years ago.
COA also hinted of a conflict of interest situation when BCDA agreed with its 55 percent partner in Fort Bonifacio Development Corp. (FBDC), Ayala Land-Evergreen Hodings, agreed to sell the BGC lots at a steep discount to the Bonifacio Global (BG) companies also owned by Ayala Land in 2012 and 2013.
“It is probable that the government may have benefitted more in the long run had FBDC been the one that developed the City Center and NCBD lots, as they were expected to do rather than having sold these lots. Stated otherwise, the shift from land development to land sale may not have been advantageous to the government,” said COA in its latest annual audit report on BCDA.
“The said lots were sold with discounts which means that the prices per square meter were below market value. All the transactions involving the sale were approved by the FBDC Board in 2012 and 2013 wherein all or majority of the seven directors of BCDA were present during the meetings,” it added.
The land deal was first questioned in 2015 by then BCDA President and CEO which claimed a P10.8 billion shortfall paid by the Ayala-BG Companies for the City Center and North Central Business District areas in BGC.
In 2017, the FBDC and Ayala-BG Companies agreed to a settlement where Ayala would pay P5.4 billion to BCDA for its share of the shortfall in payment to the sold properties. The settlement as paid in part through the buy-back of finished condo units at Suites Corporate Plaza, Meridien and Verve at a 50 percent discount.
COA said this compensation was not enough as Ayala-BG companies should have paid interest on top of the P5.4 billion to BCDA considering that the property values have roughly tripledfrom 2012 to 2017
BCDA claimed that it did not demand for interest payments because the deal was approved by the FBDC board with all BCDA representatves present in 2012. BCDA also claimed that FBDC had advanced P2 billion to BCDA without asking for discounts.
But COA was adamant.
““There was conflict of interest on the part of FBDC for selling the City Center and NCBD lots to its newly created related parties, the BG Companies, at discounts when it is FBDC that should have developed the lots. The sale of NCBD lots, which are wholly-owned by BCDA, was not provided in the Supplemental Implementing Agreement of 2009. These matters should have placed BCDA at a leverage to demand interest charges,” COA said.
COA also said it could not determine whether the P5.4 billion settlement was “complete and accurate” because
BCDA management led by president Vince Dizon did not provide sufficient documents.