THE Board of Investments (BOI) has warned Hyundai Association Resources, Inc. (HARI) it would cancel the company’s registration with the Motor Vehicle Development Program (MVDP) if the processes in its local assembly plant are not completed by June.
HARI’s assembly plant should have processes, including welding, painting, trimming, and quality control inspection, BOI managing head and Department of Trade and Industry (DTI) Undersecretary Ceferino Rodolfo said in a press conference Monday.
Rodolfo, reading the statement of DTI Secretary and BOI Chairman Ramon Lopez, said the BOI’s decision on HARI’s case does not give an “extra privilege” to HARI, or any company under the MVDP, contrary to claims made by the Volunteers Against Crime and Corruption (VACC) in the case it filed against DTI and Hyundai executives.
“He (Lopez) would like to assure the Filipino people, including the VACC, that the BOI and he, as chair, are unwavering in their duty to implement the MVDP. No preference nor favor was given to HARI or to any participant,” Rodolfo said.
Aside from Lopez, the VACC filed a criminal complaint before the Department of Justice against Hyundai Motor Company’s Chief Executive Officer (CEO) Mong-Koo Chung; President and co-CEO Won-Hee Lee; and Hyundai Motor Company (HMC) Asia and Pacific Regional Headquarters President Yong Suk Lee.
HARI executives, including Chairman Emeritus Richard Lee, Chairman Edward Go, Vice Chairman Conrad Marty, President and CEO Maria Fe Perez-Agudo, and Board of Directors members Eleazar Reyes and Ladislao Avila Jr. were also named as respondents.
“First and foremost, the BOI resolution was issued by the BOI Board as a collegial body and, as such, was deliberated and decided upon as a group with due regard to the requirements of due process and in accordance with applicable laws, rules and regulations,” Rodolfo said.
To recall, the BOI conducted an ocular inspection of HARI’s assembly plant in Sta. Rosa, Laguna in the first half of 2017, and found out that the company had failed to comply with the industry development program under Executive Order 156, but was already enjoying a 1-percent tax rate on importation of completely knocked-down (CKD) units instead of the usual 20 percent to 30 percent duty.
For her part, BOI Executive Director Ma. Corazon Halili-Dichosa said the firm’s facility in Laguna only has trimming and quality control inspection, but the welding and painting facilities are not present.
The BOI had ordered the suspension of HARI’s MVDP license in July 2017, but this did not take effect after the company filed a motion for reconsideration in August last year.
“The implication of the Motion for Reconsideration is the restoration of your privileges,” Rodolfo explained, noting that there still has to be due process and that the board is following rules and regulations in this case.
However, with the final decision last November, the BOI suspended HARI’s MVDP license and would completely cancel its registration if it fails to roll out the welding and painting facilities in its assembly plant.
The BOI also required HARI to refund the tax and duty differential it had enjoyed until the suspension of its license.
The Bureau of Customs will determine the amount of tax refund and cost differential between CKD and completely built-up units, as well as the schedule of payment for these duties.
Rodolfo further said the BOI is pushing for the compliance of HARI to fully implement its obligations under the MVDP to open opportunities for makers of local vehicle parts to partner with global companies in making the country their production hub for certain car models. This would translate to more jobs for Filipinos, he said.
“Finally, while he (Lopez) urges everyone to be vigilant against corruption, he pleads that it should not be abused so as not to be counterproductive to the concerted efforts of the government to encourage investments and facilitate and promote trade activities in the country to generate business and employment,” the trade official said.