The Senate Blue Ribbon Committee has asked the Anti-Money Laundering Council (AMLC) to look into the financial dealings of Pharmally Pharmaceutical Corporation as lawmakers doubted that it can take on billions-worth of government contracts.
At the resumption of the Senate panel’s inquiry Friday, September 10, on the purchases made by the Department of Health (DOH) during the COVID-19 pandemic, senators continued to question the over P8 billion in contracts awarded to Pharmally despite the foreign firm having a small paid-up capital of P625,000 when it was incorporated in 2019.
Based on its financial statements submitted to the Securities and Exchange Commission (SEC) in 2020, Pharmally only had P599,450 in total cash capital.
The Commission on Audit (COA) had noted that in April last year, the government awarded three contracts to Pharmally to supply a total of 12.9 million face masks worth a total of P287.86 million.
Also in the same year, the corporation had expenses amounting to over P42.1 million, P33.1 million of which were classified as “donations” in its financial statements.
Senator Joel Villanueva, who also noted the absence of a disclosure of the loans availed of by the firm, asked: “How did you finance this delivery?”
“We were a start-up, we didn’t envision the need to infuse a lot of capitalization,” Pharmally chairman and president Huang Tzu Yen explained, telling the Senate panel that their firm also “had access” to suppliers at the height of the pandemic.
“We disagree that company at that point in time does not have a lot of assets,” he later said.
Unconvinced of Huang’s responses, committee chairman and Senator Richard Gordon said that the AMLC should probe Pharmally’s bank transactions.
“I’d like to ask the [Anti-]Money Laundering Council to inspect all the bank transactions that may have occurred with this company so we will know the money trail,” Gordon said.
“Because there’s so much billions of pesos that have occurred here, and we don’t even have a money trail, where this money came from…that they were suddenly able to transact with the government without showing any other capital except for the P625,000,” he added.
Gordon speculated the possibility of money laundering in Pharmally’s transactions.
“Hindi maipaliwanag saan galing ang perang ‘yan…Biglang may pera, eh (They cannot explain where they got their money…They suddenly had the money),” he raised.
Senate President Vicente Sotto III backed Gordon’s call for an AMLC review of Pharmally’s transactions: “We will take the necessary steps.”
Later in the hearing, Huang admitted that the Pharmally borrowed money from former presidential adviser and businessman Michael Yang for some of their purchases. Yang, on the other hand, denied any participation in the firm’s transactions besides introducing them to some suppliers.
Pharmally director Linconn Ong also said that Yang “guaranteed” for them when they were sourcing supplies from China.