Hundreds Of Millions From China, Other Countries Flowed To Duterte-Linked Firm

The impeachment court also tackled on Tuesday, Oct. 6, the possibility that Cale88 Foods Corp., a food manufacturing company linked to lawyer Manases Carpio, husband of Vice President Sara Duterte, may have been used for money laundering after it allegedly received funds from China and other countries.

Carpio holds a 47.5 percent share in Cale88, which received P319 million “remittance” from Chinese companies, the prosecution earlier said.

Senate President Sherwin Gatchalian quizzed Anti-Money Laundering Council (AMLC) executive director Ronel Buenaventura about red flags based on the firm’s balance sheet.

Gatchalian said Cale88 had P776 million “inflow” and P154 million “outflow,” even though cumulative sales only amounted to P23 million, assets at P18 million, liabilities at P20 million and a paid-up capital of only P125,000.

He noted that half of Cale88 sales “came from China,” as he pressed AMLC to also look into the legitimacy of the Chinese entities pouring in the funds.

When Buenaventura said he could not testify beyond what was asked of him in the court subpoena, Gatchalian pressed his point that the banks flagged transactions linked to Cale88 because of “no underlying legal or trade obligation purpose or economic justification.”

Buenaventura said he does not want to add to the interpretation of why it was flagged suspicious.

Gatchalian asked Buenaventura if Cale88 could be considered a “candidate for money laundering” because its books did not show where the P776-million inflow came from.

Buenaventura said Cale88 can be considered a candidate for money laundering, subject to further investigation.

“In general po, we have to determine if there is unlawful activity or transaction that generated the funds,” Buenaventura said.

In his interjection, Sen. Francis Pangilinan said Cale88 received the funds from China during the period 2022 to 2025, or when Duterte is already the vice president. Buenaventura agreed.

He added that total aggregated amount that went to Cale88 according to covered and suspicious transaction reports amounted to P1,254,736,297.08.

Asked by Sen. Erwin Tulfo if the receipt of funds from China was tantamount to a “conflict of interest,” Buenaventura begged off from giving an opinion.

When Tulfo asked if there is “factual basis” to determine if the source of the funds was “legal or illegal,” Buenaventura said he is leaving it up to the court to make a conclusion.

China links

Also during the proceedings, some senator-judges expressed intention to dig deeper to uncover potential links between Beijing state-owned businesses and some local political groups.

Sen. Risa Hontiveros confronted Buenaventura over the P319 million in remittances from China to Cale88.

Hontiveros said her office conducted its own corporate background checks on several remitters and found them to be tied directly to the Chinese Communist Party (CCP) and Beijing’s foreign policy arms.

She said one of the senders of the money to Cale88, Beijing Zhenweifang Food Co., is owned by Xinjiang Fruit Industry Group, an enterprise with an embedded CCP apparatus including its own Party Committee and 11 subordinate party branches.

She added that Beijing Zhenweifang’s chairman belongs to the Chinese People’s Political Consultative Conference (CPPCC), a body cited in international intelligence reports as the “premier overt United Front organization” for foreign interference.

“Why is this important, Attorney Buenaventura? Because this Xinjiang Fruit Industry Group is not an ordinary company. It’s a Chinese state-owned enterprise. It advances the interests of the Chinese Communist Party,” Hontiveros stressed.

Buenaventura declined to characterize the transactions as a cause for concern, saying he needs to review the background of the entities.

The push to investigate Chinese funding extended to political organizations supporting the Duterte family, with Sen. Bam Aquino citing the Chinese government’s denial of donations to the Tapang at Malasakit alliance.

After Buenaventura confirmed that records of Tapang at Malasakit were not included in the AMLC subpoena, presiding office Francis Escudero observed that the group might not fall under the agency’s regulatory scope.

“If I may, Tapang at Malasakit is not a juridical entity I believe… that may have an account or a policy covered by the AMLC,” Escudero said.

Other countries

Apart from China, eight other countries – some of which are notorious for money laundering – had been the sources of nearly P50 million in remittances that flowed into a food company linked to Carpio.

Records flashed on screen on Day 34 of the impeachment trial of Duterte on Tuesday showed that inflows of funds to Cale88 Foods Corp. also came from Russia, Ukraine, Kazakhstan, Lithuania, South Africa, Tajikistan, the United Arab Emirates and the United States.

Senator-judges pressed for a breakdown of the foreign funds and questioned the AMLC if it had ever moved to freeze the accounts.

Based on data flashed by House prosecutors, Cale88 received P12.8 million from Russia, P12 million from Ukraine, P7.24 million from Kazakhstan, P6.23 from Lithuania, P6 million from South Africa, P3.8 million from Tajikistan, P684,456 from UAE and nearly P600,000 from the US.

Sen. Raffy Tulfo grilled Buenaventura on whether the AMLC had ever unilaterally petitioned the Court of Appeals (CA) for a freeze order on Cale88’s accounts or demanded contracts justifying the purpose of the deposits.

Tulfo also questioned why the council did not flag the non-Chinese inflows despite the reputation of some of the countries as money laundering haven. “Don’t you find it suspicious that a large part of the funds that went to Cale88 came from countries with critical reputation for money laundering like Russia, Kazakhstan, Tajikistan, South Africa, ‘di ba kayo nagduda doon?”

Buenaventura declined to make conclusions and apologized to the court. “I have no personal knowledge on the current status of the countries mentioned or their financial or money laundering standing in the international community,” he said.

Requirement

He also said during direct examination by private prosecutor Mae Divinagracia that banks are required by law – not just encouraged – to report all suspicious transactions to AMLC.

“The law used the word ‘required.’ So they’re required to report suspicious transactions. The law did not mention any threshold. The law says regardless of the amount,” Buenaventura said.

“A suspicious transaction could be higher than the threshold or it could be lower than the threshold, as long as the presence of suspicious circumstances are there,” he said.

“Essentially, suspicion is one based on the knowledge of the covered person or reporting entity, based on the profile of the client and taking account all other circumstances to determine whether or not there is a suspicious circumstance,” Buenaventura said.

“The threshold, at least insofar as the law requires, is suspicion or suspicious circumstances,” he added.

But defense counsel Mark Vinluan insisted that such bank records are covered by the confidentiality rule.

“Covered institutions are required to report suspicious transactions. They are not just encouraged to report suspicious transactions,” Divinagracia said in response. – With Delon Porcalla, Daphne Galvez