Shares of Megawide Construction Corp. slumped by as much as 10% on Friday, following the indictment of key executives for violations of the Anti-Dummy Law in connection with the Mactan-Cebu International airport (MCIA) contract.
Megawide shares closed at P6.27 apiece on Friday, down 8.20%, after the Justice department on Thursday said it indicted 15 executives of GMR Megawide Cebu Airport Corp. (GMCAC) based on a complaint filed by the National Bureau of Investigation.
GMCAC is a joint venture between Megawide and India’s infrastructure giant GMR Group that won in 2014 the government contract to develop and operate the MCIA.
Megawide on Friday said it has not received any official documents pertaining to the filing of criminal charges against its officers.
“Megawide and its subsidiaries have always been and continue to be firmly adherent to all applicable laws, rules, and regulations, particularly regarding public-private partnership projects, such as the [MCIA],” it said in a disclosure.
The Department of Justice (DoJ) on Thursday said a panel of prosecutors found that eight foreign nationals Andrew Acquaah-Harrison, Ravi Bhatnagar, Ravishankar Saravu, Michael Lenane, Sudarshan Madhav Doddathota, Kumar Gaurav, Magesh Nambiar, and Rajesh Madan were acting as executive officers, managers, and/or employees of GMCAC “in conspiracy” with other Filipino executives.
Also named in the indictment were GMCAC officers and board directors, Edgar B. Saavedra, Manuel Louie B. Ferrer, Oliver Y. Tan and Jez G. Dela Cruz. Mr. Saavedra is the chief executive officer (CEO) and chairman of Megawide, while Mr. Ferrer is the chief corporate affairs and branding officer. Mr. Tan is a Megawide director, while Mr. Dela Cruz is an assistant vice president.
The DoJ said Messrs. Saavedra, Ferrer, Tan and Dela Cruz, along with fellow officers and board members, GMR Group Chairman Srinivas Bommidala, P. Sripathy, Vivek Singhal, “allowed and permitted” the eight foreign nationals to manage and operate the MCIA which should only be reserve for Filipino citizens since MCAC is a “public utility corporation.”
Also indicted was Steve Y. Dicdican, the general manager and CEO of the Mactan Cebu International Airport Authority, for “knowingly assisting, aiding, and abetting the commission of a violation of the Anti-Dummy Law.”
“The law is aimed at prohibiting the use of [a] Filipino for foreign interest, so those prohibited to do business in the Philippines, like foreigners, will not do it through the Filipinos,” Antonio A. Ligon, law and business professor, said in a phone call.
Article was originally published in Business World and written by K.C.G Valmonte.
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