The laundry shop business is certainly booming. But recently another kind of laundry service has been booming too – it is money laundering with impunity.
Long before BBM became president, one form of money laundering was to use ill gotten money and buy paintings, jewelry, branded bags while posting on Facebook, like in the days of the PDAF scam (2013) where an estimated P10 billion were paid to politicians as kickback.
But when you buy up what’s in the market, chances are people lose interest and value depreciates. Paintings, jewelry, bags and expensive accessories don’t keep their value, so politicians began losing money while hiding them.
In the years that followed, corrupt local and national politicians laundered their plunder by going into “land banking” where they buy large tracts of land, beach properties or any piece of land whose value would appreciate.
Some invested in or hired dummies to build up hotels, resorts and townships far away from Metro Manila and the media. The younger thieves who hero worshipped action stars and fast cars opted to put their money in luxury sports cars and SUVs.
They enjoyed it so much that some even put money in high end gray market dealerships. They had their cake and ate it too, until they got so greedy. They imported luxury cars themselves, cheated on taxes with impunity and undermined the stability of local distributors who paid taxes to the government.
To put a stop to it, the prestige brands banded together, worked with the media and began exposing purchases and arrivals of supercars being imported three dozens at a time. Now you don’t see them at the parking lot of Congress or golf courses.
From paintings, super-cars, land banking and dummy corporations, the money laundering service has now leveled up to “acquisition with impunity,” “hostile takeovers” or brand poaching, still using dummies but with a huge war chest.
All this is not new, but it is a new and improved version. Money launderers used to enter into joint ventures, silent partnership or come in as angel investors to help a franchise or business grow.
But for the last two years, the money launderers have made “indecent proposals” directly to CEOs, board members or brand owners to buy their company or take an established business or dealership away from its current owner in return for a better deal or bigger business.
Early last year, some of those given “indecent proposals” were a steel mill, an engineering and construction giant, as well as some media outlet or outlets. Even after the ghost project scandals blew wide open, the money launderers have not stopped.
If anything, they have been more aggressive, probably desperate to wash all the stolen money and kickbacks from ghost flood control projects. One area that is now buzzing with suspicion and dirty speculation is the automotive industry.
A couple of motoring media veterans have “hinted” in their online articles about brand and product poaching in relation to money laundering. A few calls confirmed that a couple of operators are under suspicion, given their extremely aggressive takeovers of brands and products.
The changing of hands between a company or two, or transfer of dealership from one company to another would be normal. But when one group manages to acquire, some say “poach,” 10 to 20 different products and brands from previous owners in a short period of time, you have to wonder!
These so-called “poaching” incidents are currently the buzz in the automotive industry as former brand owners, marketing staff, dealers and executives share how they were “dumped” by foreign executives for weak sales or unsatisfactory performance without serving notice.
This has happened to several Chinese car distributors, Japanese and American automotive accessories such as tires, wheels, EU lubricants, etc. who were poached quite recently. Adding insult to injury, some share that they only found out from customers and their employees.
If the business climate and sales are so bad, why buy up so many struggling brands and companies, especially when inflation and economic forecasts say things will only get worse in the near future?
Industry insiders as well as the media covering the automotive businesses are wondering who and where do these hostile takeover operators get their funds. Every brand and individual product requires sufficient funding, credit facilities and physical presence or offices.
If you take over 10 to 20 products or brands in a short span of time, put up dealerships and maintain a legitimate sales force, that can only mean you have hundreds of millions if not billions to plant in all those operations.
At a time when credit and interest rates are tight enough to cause asphyxiation, where are the hundreds of millions coming from? To be fair, not everything that wiggles is a worm.
But when facts add up, when long held businesses are taken over without respect or compensation, when credits and stocks all fall on the victims of “poaching” that is industry wide, the only logical solution is to get the attention of the authorities.
The situation raises questions on anti-trust, possible money laundering, unfair competition and, if all holds true, perhaps even economic sabotage.
Perhaps the Philippine Competition Commission, the Department of Trade and Industry, the AMLC or Anti-Money Laundering Council might want to check it all out.