Phoenix CEO Faces Philippine Prosecutor’s Oil Smuggling Charges

The Philippine justice department ordered the filing of smuggling charges against the head of Phoenix Petroleum Philippines Inc. Stocks fell.

Justice Secretary Leila de Lima today ordered government prosecutors to sue Phoenix President and Chief Executive Officer Dennis Uy and Customs broker Jorlan Cabanes, reversing a Nov. 16, 2012 ruling that cleared both.

“We are extremely surprised by the reversal of the original decision absolving Dennis Uy of the unsubstantiated charges,” Raymond Zorrilla, Phoenix assistant vice president, said in a mobile-phone text message. “We insist on our right to due process and fair play as we seek to refute the allegations of Customs.”

Phoenix, which sells refined petroleum products and operates oil depots, didn’t pay taxes on 5.98 billion pesos ($145 million) of oil shipments in 2010 and 2011, according to a copy of a resolution issued yesterday, released to the media today. Shares fell 9.2 percent to 9.44 pesos, the sharpest decline since March 12.

The Philippines, under pressure to curb tax evasion and boost revenue, filed separate complaints today at the justice department against sugar traders for alleged smuggling. A discrepancy between 106.9 million barrels of oil demand in 2011 against 67.6 million barrels imported indicated smuggling, Finance Secretary Cesar Purisima said on April 2. The nation imports almost all its oil needs.

Customs Commissioner Ruffy Biazon is working on a plan to curb smuggling and the reforms will be significant, President Benigno Aquino said this month.

Import documents submitted by Phoenix “raise serious doubts as to the legality of the importation and are indications that fraudulent acts were committed in the process,” de Lima said in the order.

Uy and Cabanes had worked on the processing and release of oil shipments that had been abandoned in favor of the government for failure to file import entries, according to the April 24 order.

Import documents submitted by Phoenix during the preliminary investigation had “discrepancies, inconsistencies and variance” compared with data from the Bureau of Customs, which filed a complaint against Phoenix in 2011, de Lima said in the order.

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