LISTED property firm Omico Corp. said the Department of Justice (DOJ) has ruled in its favor on a complaint filed against it by investment firm Guevent Investments Development Corp., after their supposed joint venture failed.
In a disclosure to the Philippine Stock Exchange, Omico said it received a copy of the resolution from the DOJ, dismissing the syndicated estafa complaint filed by the Guevarra camp against the mining and real estate firm.
“Please be informed that we received a copy of the resolution from the Department of Justice dismissing the complaint for alleging violation of Article 315 of the Revised Penal Code in relation to Presidential Decree 1689 (Sydicated Estafa) filed by Guevent Investments Dev. Corp., Honeycomb Builders Inc., Reynaldo S. Guevara and Carmen T. G. Monfort (Guevara et al.) against all past and present directors of Omico Corp.,” the disclosure read.
This stemmed from a joint venture way back 1995 when two firms, Guevent and Honeycomb Builders, partnered with Omico to construct a mixed-use condominium tower standing on a 4,959-square-meter parcels of land owned separately by the three firms.
One of the conditions of the deal was for Omico to put down P250 million paid up capital for the development of the mixed-used condominium.
The complaint pointed that Omico did not contribute such amount even after raising more than P250 million via private placement or share sale exclusive to 16 buyers.
Despite using the funds for its own shareholders’ benefit in a later time, Omico, in defense, cited the Asian financial crisis in 1996, which led to shelving the project, and the funds.
“When the real estate market started to pick up in 2001, the development of a viable condominium building under the [joint venture agreement]was rendered impractical with the implementation by Makati of its ordinance limiting the height of a proposed building vis-à-vis its land surface area,” Omico said.
“Subsequently, instead of proceeding with the project, Guevent and Honeycomb, with the conformity of Omico, chose to exercise their option under the joint venture agreement, which is to negotiate together with Omico with another party (Alphaland Corp.) for the development of their contiguous properties,” the mining and properties firm said.
“This latter negotiation with Alphaland did not come to fruition and the properties of the parties remained idle, save for some advertising income on the property that were collected by Guevent and Honeycomb,” it added.
Despite continuous flow of advertising income from the billboards standing on the joint and contiguous properties, Omico claimed the Guevara camp was “not remitting to Omico for several years.”
This led to Omico fencing off its portions of the property in early 2010, preventing Guevara and company from benefiting from the listed firm’s property.
“This irritated Domingo Guevara and prompted him to lodge an informal complaint against Omico before the NBI [National Bureau of Investigation],” Omico said.
“Obviously, there is no cause for complaint. The funds raised by Omico pursuant to the joint venture came from its stockholders and not from the Guevaras. The funds remained with Omico and were never put into a joint venture company. The properties of the Guevaras remained with them and were never transferred to a joint venture conduit,” the firm said.
“Such being the case, Omico has the unabridged right to dispose of its own funds in a manner that its stockholders deem fit,” it added.
The four contiguous properties were entirely owned by the Guevara camp, but were subject to foreclosure by China Banking Corp. due to its inability to settle their obligations.
In 1995, the Guevaras sought help from Omico through its then president Roman A. Cruz Jr., who then lent a hand to save the properties from foreclosure, while having a portion of the properties—two out of the four parcels—sold to Omico.
Roman A. Cruz Jr. and Honeycomb president Reynaldo Guevara originally signed the joint venture.
Omico cited Reynaldo Guevara also sat in the board of Omico as director from December 2,1999 to April 23, 2003 when all decisions regarding the shelving of the joint venture project were made.