Senators on Friday grilled former Presidential Adviser Michael Yang and two key executives of Pharmally Pharmaceuticals Corp. on the over P8 billion in contracts for personal protective equipment (PPE) the company bagged in 2020 from Department of Health’s (DOH) pandemic funds that were moved to a controversial unit of the Department of Budget and Management (DBM).
Most of the questions focused on how the then newly incorporated firm, with only a P625,000 paid-up capital, paid for the products it got from Chinese suppliers in order to secure delivery. This, as Senate probers sought to find the “money trail” in an inquiry that President Duterte had said was politically driven and unduly disrupts the work of officials involved in fighting the Covid-19 pandemic.
At the fifth Blue Ribbon committee hearing chaired by panel Chairman Sen. Richard J. Gordon, two Pharmally officials—Huang Zhu Yen and Lincoln Ong—said Chinese businessman Michael Yang, a friend of Duterte, had simply helped link them up with the Chinese suppliers so they can deliver the huge orders for face masks and face shields.
However, Sen. Panfilo Lacson, who grilled Yang and Pharmally’s Ong at length, asked Gordon to enforce a pending arrest warrant for the two men for being “evasive.” There are actually six standing arrest warrants against Yang and five Pharmally officials issued earlier this week for their failure to heed the Blue Ribbon summons. The warrants were held in abeyance after they notified the Blue Ribbon they would attend the Friday hearing virtually.
Pressed alternately by Gordon, Lacson and Minority Leader Franklin Drilon, Ong sounded confused in replying to their main question: where was Pharmally getting its funds before November 2020, when, per Pharmally CEO Huang Zhe Yen, they first obtained a letter of credit for P500 million from UnionBank.
Pharmally’s first transaction was worth P54 million, Drilon noted, “but they only had P625,000, so where did their money come from? He [Ong] said, bank accounts. The question is, whose bank accounts?”
Drilon said Ong was “clearly lying,” because, “Clearly, the corporation had no capacity to pay the initial order of P54 million.”
Ong later claimed, belatedly, that they were able to deliver initially because the supplier “loaned their stocks” to Pharmally.
Drilon wanted Blue Ribbon sheriffs to arrest Ong “right now.” Throughout his testimony, Ong did not take off his mask because he said he was Covid-positive and needed to protect his family.
Gordon had asked the Anti-Money Laundering Council (AMLC) to check the bank transactions of Pharmally for a possible case of money laundering.
Meanwhile, Sen. Risa Hontiveros also asked Gordon to direct the Bureau of Immigration to check the entry and exit data of Huang and his father, because the former testified he was in the Philippines in 2017, but Hontiveros cited information that his last entry date in Manila was in 2005.
Sen. Joel Villanueva first made the focus on how Pharmally financed its multibillion supply contracts to the DOH, through the Procurement Service (PS), an office under the DBM, early in the hearing. He found it incredulous that Pharmally could deliver on its first supply contract, for P54 million, given its puny financial assets, as declared.
Pharmally’s first order from PS-DBM was for 2.4 million face masks, worth P54 million for an April 14, 2020 delivery. “How did you finance this delivery? Villanueva asked Mr. Huang.
Huang replied that being “a start-up,” they did not need much capitalization.
Villanueva pressed on: “How did you finance it?” and he then reminded Huang that he and PS-DBM head Christopher Lao had told senators “they only paid you after the delivery—so I wonder, where did you get the money to finance the first batch?”
Huang replied that, they had “access to inventories of our suppliers.”