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Subic Bay Metropolitan Authority (MPD-SBMA)

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27 June 2009

Firm runs Subic casino, hotel ‘illegally’ - SBMA

The Subic Bay Metropolitan Authority has asked the public to avoid conducting business with a gaming and leisure company that used to run the premier group of hotels and a casino in this freeport, saying the firm is occupying land and conducting business illegally.

In an advisory, SBMA Administrator Armand Arreza said Legend International Resorts Limited (LIRL), a Hong Kong-registered company that ran hotels and a casino here until 2006 when its gaming license was revoked, is “illegally occupying the land and improvements that constitute the Main Legenda, El Centro and Grand Legenda, and is illegally doing business [inside the freeport zone] since LIRL does not have a valid and subsisting lease agreement with SBMA.”

Arreza said the SBMA cancelled LIRL’s certificate of registration and tax exemption (CRTE) and permit to operate (PTO).

LIRL side

In a statement, LIRL accused SBMA of denying it due process.

LIRL said it has appealed the SBMA decision to the Office of the President.

It said SBMA “does not have any legal or factual basis to terminate [LIRL’s] lease.”

“Since October 2006, we are current in the payment due to the SBMA. SBMA continues to accept our rental payments,” it said.

Arreza said the firm owes the government some P850 million in unpaid rent.

“The SBMA shall proceed to take the appropriate legal action to address LIRL’s illegal occupation of its former lease premises and its illegal conduct of business,” Arreza said.

LIRL has been in a state of financial turmoil and has failed to pay its debts to creditors, including the SBMA, its officials said.

Arreza said from 2004, SBMA could not collect unpaid rent from LIRL because of pending corporate rehabilitation proceedings and an order issued by the regional trial court of Olongapo City.

Gambling woes

LIRL’s troubles worsened in 2006 when the Philippine Amusement and Gaming Corp. revoked its license to operate a casino when it failed to remit 15 percent of its revenues, or more than P1 billion a year, to Pagcor.

Also in 2006, a Hong Kong court appointed a liquidator for LIRL, whose task was to regain the company’s profitability and save the jobs of more than 1,000 employees, it was learned.

An Olongapo court in 2004 issued a stay ordered that prevented SBMA from collecting from LIRL, Arreza said.

“All of the company’s other creditors were put in the same situation,” he said.

Last February, however, the court granted SBMA’s motion to dismiss the rehabilitation proceedings and lift the stay order, Arreza said. (Robert Gonzaga, Inquirer Central Luzon)

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