The Ombudsman has upheld the indictment of former Procurement Service-Department of Budget and Management (PS-DBM) officials and Pharmally executives for multiple counts of graft in relation to the alleged anomalous purchase of Covid-19 RT-PCR test kits worth over P4 billion.

The decision was in response to PS-DBM Undersecretary Lloyd Christopher Lao's motion for reconsideration, which Ombudsman Samuel Martires has denied.

In an order dated 3 May, Martires affirmed filing three counts of graft against Lao and ex-DBM procurement group director and Overall Deputy Ombudsman Warren Rex Liong, DBM procurement management office Paul Jasper de Guzman, and Pharmally executives Mohit Dargani, Twinkle Dargani, Linconn Ong, Justine Garado, and Huang Tzu Yen.

Martires also recommended the filing of separate graft charges against former PS-DBM executives Christine Marie Suntay, Webster Laureñana, August Ylagan, and Jasonmer Uayan and Pharmally employee Krizle Mago.

The Ombudsman found PS-DBM officials guilty of administrative charges and ordered their dismissal from service, forfeiture of their retirement benefits, and perpetual disqualification for reemployment in government service.

The recommendation of graft raps stemmed from the irregularities in the procurement PS-DBM of 51,400 units of RT-PCR test kits in 2020, totaling ₱4.165 billion to Pharmally.

Investigation revealed that the government, through PS-DBM, had three deals with Pharmally, a startup firm with a capital of only P625,000, for the government's pandemic supplies during the peak of Covid-19 in 2020 and 2021.

Despite being a startup, the Pharmally managed to secure the lion's share of government deals.

In its August decision last year, the Ombudsman said that the respondents' concerted and conspirational acts enabled the award of a multi-billion worth of contract to Pharmally, notwithstanding the existence of other corporations that are financially and technically capable of supplying and delivering test kits at an equal or lower price.

In its current order, the Ombudsman said Pharmally's funds came from its irregular transactions with PS-DBM.

“Its financial statements indicate that prior to the 2020 dealings with the PS-DBM, the company had no business activity from September to December 2019. For the year ended 31 December 2019, Pharmally even incurred a net loss of P25,550,” it said.

“But, in 2020 where PS-DBM irregularly awarded procurement contracts to Pharmally, the corporation earned a net taxable income of P318,337,099.00 with a declared net sales/revenues/receipts/fees of P74.8 billion,” the order reads.

The Ombudsman further said that the payment details for the test kits “suggest that the checks in the name of the corporation were issued when Lin [Wei Xiong] was the Financial Manager enjoying extraordinary power over the corporate funds in Pharmally's depositary bank. After all, Pharmally can be regarded as his 'dummy' under the law.”

Lin, who was not among the initial respondents, now also faces three counts of graft, according to the Ombudsman.