Jurisdiction - Philippines
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Philippines – Recent Anti-Corruption Developments.

30 July, 2012

 

Overview
 
In 2010, the current President of the Philippines, Benigno Aquino, campaigned for election with the slogan, “If there’s no corruption, there’s no proverty.” Since taking office, the fight against corruption has remained a theme of the President’s public addresses, most recently in a June 2012 speech marking the 114th anniversary of independence from Spain. Despite this, nearly two years into his presidency, his administration has proposed few reforms to the current anti-corruption enforcement regime and conducting business in the Philippines continues to present significant corruption-related risks.
 
Recent international corruption cases
 
Wynn Resorts
 
A boardroom dispute between the casino operator, Wynn Resorts, and one of its major shareholders and non-executive directors, Kazuo Okada, has led to allegations of bribery in the Philippines. The dispute allegedly stemmed from Okada’s push to develop new casino projects in the Philippines. Wynn Resorts objected to this, claiming that these developments would compete with its Macau operations. Events led to Okada bringing proceedings against Wynn Resorts in Nevada claiming, among other things, that the company was unlawfully withholding information from him and seeking the production of information relating to a US$135 million donation to the University of Macau.
 
In February 2012, Wynn Resorts removed Okada as a non-executive director following the commission of an internal report authored by a former director of the FBI. The report alleged that Mr Okada appeared to have engaged in a longstanding practice of making payments and gifts to two chief gaming regulators at the Philippines Amusement and Gaming Corporation who oversee and regulate his provisional licence agreement to operate in the Philippines. This case represents an example of FCPA charges being used as a weapon in boardroom disputes.
 
Recent domestic corruption cases
 
Former President facing corruption charges
 
Former President Gloria Macapagal Arroyo and her husband face charges of corruption in relation to their involvement in a US$330 million broadband deal with a Chinese telecommunications company. News reports indicate that Arroyo’s husband was promised a US$60 million commission if the deal went through, and charging documents claim that the Arroyos exerted influence over members of the government responsible for its approval. In April 2012, Arroyo and her husband pleaded not guilty before the anti-graft court, the Sandiganbayan. If convicted, they could each face ten years in prison.

 

 

For further information, please contact:

 

Mark Johnson, Partner, Herbert Smith

mark.johnson@herbertsmith.com 

 

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