CH gets SRP sale money as Tom goes to court

CH gets SRP sale money as Tom goes to court

CEBU, Philippines — On the same day former mayor Tomas Osmeña asked the court to stop Cebu City from using the money from the sale of South Road Properties (SRP) lots, the court allowed the city government to withdraw that money – amounting to P3.6 billion – that the buyers have consigned with the court.

Lawyer Jose Daluz III said the city received the checks from the court on Monday afternoon.

City Legal Officer Rey Gealon also said his office received the order from the Regional Trial Court on the release of the funds consigned by the consortium of SM Prime Holdings, Inc, Ayala Land, Inc., and Cebu Holdings, Inc.

“Thereafter, once the consigned amounts are released, plaintiffs’ (consortium) obligation in order to the Deed of Sale on Installment dated 7 August 2015 is considered discharged and extinguished,” reads the order of RTC Judge Estela Alma Sinco.

Gealon told reporters yesterday:

“This is a victory for the City of Cebu. Imagine the programs and projects that would be comprehensively implemented out of this almost P4billion pesos for the good people of Cebu.”

The total consigned amount of P3,636,603,333.34 represents the second and third payments the consortium made for the 26.3 hectares of SRP lots it bought from the city for P10.009 billion in 2015 during the time of former mayor Michael Rama.

The second payment amounted to P1.868 billion while the third and final payment amounted to P1.768 billion.

The consortium consigned the money with the court after Osmeña refused to accept the money when he assumed office in 2016 owing to alleged defects in the contract the city entered into with the consortium.

With Osmeña out of City Hall after losing in the May 2019 polls, the city, now headed by Mayor Edgardo Labella, decided to use the money.

Osmeña Petition

But Osmeña is adamant and still believes using the money will be disadvantageous to the city.

In the 76-page complaint he filed in court, Osmeña said there are several defects in the Negotiated Sale on Installment executed on August 7, 2015, which involved the sale of the 26.3- hectare property to the consortium of Ayala Land, Cebu Holdings Inc. and SM Prime Holdings at P10 billion and the 19.2-hectare property sold to Filinvest Land Inc. at P6.7 billion.

Osmeña filed the petition for declaratory relief with prayer for a Temporary Restraining Order and Writ of Preliminary Injunction against Labella, the City Council, SM Prime Holdings, Inc., Ayala Land, Inc., Cebu Holdings, Inc., Filinvest Land, Inc., Filinvest Alabang, Inc., Cyberzone Properties, Inc., Anesy Holdings Corporation, Igold Holdings Corporation, and Betterfield Phils. Corp.   

“This Petition for Declaratory Relief is filed pursuant to Rule 63 of the Rules of Court and seeks a judicial determination that the contracts involving the sale of certain lots, comprising Four Hundred Fifty Five Thousand Seven Hundred Sixty Nine (455,769) square meters, located at the South Road Properties owned by the City of Cebu (hereafter, the “SRP lots”) to the SM-Ayala Consortium and to the Filinvest Group, respectively, are VOID ab initio, or in the alternative, are not effective,” Osmeña’s complaint reads.

Some of the alleged defects Osmeña cited include the following: A consortium was declared winner of the bidding but the consortium never submitted any document showing the consortium thereby stating that the consortium was not even pre-qualified to bid and was not a valid bidder; the Negotiated Sales on Installments required the approval of the Commission on Audit but no approval was given by COA for the lot sale; and that the contracts require approval of the Philippine Competition Commission for its validity.

The other alleged defects include absence of authority for the city to enter into the Negotiated Sales on Installment; the passage of a resolution by the City Council deferring further action on the sale of the lots; and failure of the Committee on Awards to comply with standard government procedures in posting about the bidding publicly.

Osmeña said there was a Supplement Agreement between the city and the SM-Ayala Consortium stating that both parties reportedly admit there was no approved ordinance confirming and ratifying the authority of the city to execute and deliver the deed of absolute sale. JMO (FREEMAN)


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