Concerned Filipino-Americans have filed complaints against Chevron Corporation before the United States Securities and Exchange Commission (US SEC) over the sale of its interests in the Malampaya gas field to Dennis Uy’s Udenna Corporation.
Based on a Rappler report, the parties filed a Tips, Complaints, and Referrals (TCR) with the US SEC on Thursday (US time) against the oil giant for allegedly violating the US Securities and Exchange Act and other graft and corruption provisions when it sold Chevron Malampaya LLC to Udenna’s UC Malampaya in March 2020.
Loida Nicolas Lewis, one of the complainants, said Chevron subsidiaries Chevron Philippines and Chevron Malampaya conspired with local government officials that may have violated both Philippine and American laws when the company filed its 2020 report to the US SEC. Lewis is a staunch critic of Pres. Rodrigo Duterte.
The group hopes that the US SEC would conduct a thorough investigation on the transaction between Chevron and UC Malampaya and that the sale would be voided.
Lawyer Rodel Rodis, another complainant, said Chevron may have particularly violated Section 10(b)(5) of the US Securities and Exchange Act, which concerns securities fraud. The oil giant, Rodis said, released “misleading statements and concealments” about the sale of Chevron Malampaya.
In its US SEC filing in March 2020, Chevron claimed that it has completed its sale of the 45% stake in the Malamapaya gas-to-power project with proceeds of over $500 million received in the first quarter.
Rodis claimed that there was a transfer of revenues to Udenna even before the transaction was closed, which was done allegedly to finance the transfer of shares. The Fil-Am lawyer pointed out that Chevron failed to disclose this transaction.
The complainants also claimed that Chevron failed to disclose that their subsidiary, Chevron Malampaya LLC, has a 45% operating interest in the gas field, as well as the technical and financial qualifications of UC Malampaya, which they claim to be a breach of fiduciary duty.
Six other Fil-Ams joined Lewis and Rodis in the complaint. Lewis and Rodis were also among those who filed graft cases against Uy and Energy Sec. Alfonso Cusi before the Office of the Ombudsman last year.
On the local front, The Senate has recommended to the Office of the Ombudsman and the Civil Service Commission the filing of criminal and administrative charges against Cusi and other Energy officials for “railroading” the sale of Chevron’s stake to Udenna.
Sen. Sherwin Gatchalian, who chairs the Senate Committee on Energy, said the DOE violated Presidential Decree 87 or the Oil Exploration and Development Act and its own Department Circular DC2007-04-003 – which says that buyers should be evaluated technically, legally, and financially by the department.
Based on the committee’s findings, UC Malampaya had a negative working capital of $137 million. However, Uy insisted on having enough capitalization for the purchase of Chevron and Shell Philippines Exploration B.V.’s combined 90% share in Malampaya.