5 Megaworld assets attached for ‘fraud’ — owes construction firm P900M

Some five income-generating properties of Megaworld Corp., the country's largest office landlord led by tycoon Andrew L. Tan, were temporarily frozen by the Quezon City Regional Trial Court, Branch 105, through a Writ of Preliminary Attachment, or WPA, for alleged failure to pay close to P1 billion in obligations to construction company Datem Inc.

In an order dated 14 November 2023, Presiding Judge Rochelle Yvette D. Galano affirmed that Megaworld must pay P873,324,248.89 to Datem under a mutual agreement in September 2022.

Projects covered

The projects covered by the decision were Uptown Parksuites Towers 1 and 2, Eastwood Global Plaza corporate tower and luxury residences, One Le Grand Tower, 18 Avenue De Triomphe, and Clark Green Frontier.

Galano stated in the order that Datem had provided sufficient evidence to support its allegation of fraud against Megaworld, which justified the issuance of the WPA.

"Verily, the alleged fraud committed by (Megaworld) is taken into account. To the court, such equates to the defendant's insincerity in paying the amount due to the plaintiff, knowing fully well that it was already in default.

"These circumstances of fraud committed undoubtedly support the issuance of a WPA in favor of (Datem)," Galano said.

A WPA is a provisional remedy issued upon the order of the court to compel appropriate action in a pending case. In this case, the issued WPA compels Megaworld to finally settle its obligations to Datem.

Non-compliance decried

Datem claimed it completed its work within the agreed time frame, so it was confident in issuing a Certificate of Settlement to Megaworld.

Despite being required to pay, it said Megaworld willfully refused to do so.

The company instead chose to launch big-ticket projects and sell condominium and residential units to clients and customers. It also managed to dispose of "massive amounts of money by declaring staggering dividends instead of settling its obligations."

'Fell on deaf ears'

According to Datem, it had sent eight letters to Megaworld, but the demands "fell on deaf ears."

The company then took its case to court, which ruled in its favor.

Datem is the construction firm that built the Sheraton, Okura, and Hilton hotels in Pasay City; the Venice Grand Canal Mall in Taguig City; and the Savoy Hotel and Belmont Luxury Hotel in Boracay, among others.

DAILY TRIBUNE contacted Megaworld for comment but received no response at press time.

Based on the latest financial data disclosed to the Philippine Stock Exchange, Megaworld's net income from January to September this year surged by 39 percent to P13.5 billion from P9.7 billion last year.

The growth was attributable to the stellar performance of its business units.

On the other hand, the company's net income attributable to the parent company's shareholders also jumped by 43 percent to P12 billion from last year's P8.4 billion.

Meanwhile, consolidated revenues increased by 14 percent to P48.6 billion during the period, buoyed by robust real estate bookings, leasing and hotel operations.

Since the start of the year, Megaworld has launched P69.3 billion worth of projects, with three big projects rolled out in the third quarter alone.

To date, Megaworld has 30 master-planned integrated urban townships, integrated lifestyle communities, and lifestyle estates across the country.