The following sample essay is a case study for Globe Asiatique. To read the introduction, body, and conclusion of the essay, scroll down.
OVERVIEW OF THE CASE Globe Asiatique (GA), also known as Globe Asiatique Realty Holdings Corporation, is known for its market-oriented and service oriented quality homes at affordable prices. Through its marketing strategy, GA became one of the most well-known housing developers in the Philippines.
According to the founder Mr Delfin Lee, it was named as Globe Asiatique “because we want to be global in thinking and standards of quality, at the same time we’re excited about being Asian,” aside from that GA is a privately-held real estate company and it’s notable projects include the GA Twin Towers, The Enclave, and Xevera Bacolor and Xevera Mabalacat.
The housing business has been basically a family affair. Son and heir Dexter is the vice president for finance and executive vice president, while daughter Divine is the vice president for international sales and marketing.
GA is really a business, established by Mr Delfin Lee for the benefit of his family. Globe Asiatique (GA) was established in November 22, 1994 with its founder, developer, and CEO Delfin Lee who first entered the real estate business in 1992. GA’s first project was the Santa Barbara Villas I in San Mateo, Rizal in 1994. The subdivision project was a socialized housing project, which initially targeted the generations of employees who worked for his parents’ and grandparents’ lumberyard business in Sampaloc, Manila. Eventually, the P150, 000-worth two-room units became affordable through homebuyers’ access to a Pag-IBIG loan.
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In 1997-1998, GA battled with financial crisis when the Asian Financial Crisis hit the Philippines. Nonetheless in 2000, GA continued with its socialized housing projects and set-up the Santa Barbara Villas II, which targeted the police force, soldiers, and teachers as clients. It then moved on to target other buyers like OFW’s and office-workers who can afford to pay P750, 000 for a condo unit in Metro Manila. Then in 2002, GA partnered with Malaysian partners and created Filmal Realty Corporation, which developed another community with units less than P1 million.
In 2003, the GA Tower Condominium I was built along EDSA. Two years after, in 2005, the second condominium was constructed. These two condominium towers are known as The GA Twin Towers. It has amenities like swimming pool, gym, spa, and several fast-food establishments. Each tower has 30 floors with 600 regular units. Each floor also has 24 loft-type units, while the two uppermost floors contain penthouse units. In the same year of 2003, the community and townships development was made with Saint Monique Valais in Rizal and with Chateau Valenzuela in Valenzuela, Valenzuela City.
Saint Monique Valais houses the Le Clole du St. Monique, the most distinguished school within Binangonan, Rizal. On the other hand, Chateau Valenzuela is a five-star condominium project inspired by European culture. It has a total of 18 buildings with each building named after a famous European landmark. Through its continuous innovations and improvements of quality homes, GA was awarded the Leading Developer during the Kabalikat sa Pabahay Awards in the same year. In 2005, Casa Ibiza in Antipolo and Golden City Business Park in Bulacan was set.
Casa Ibiza is a Mexican inspired island resort getaway in Barangay Dalig II, Antipolo, while Golden City Business Park is an industrial site in Wakas, Bocaue, Bulacan. Recognition was awarded to GA and earned itself the Marketing Award for GA Towers. In 2006, GA launched The Enclave in Angeles, Pampanga. The project is an American inspired housing project featuring nine modern style homes namely, Van Der Rohe, Koolhaas, Gehry, Breuer, Mayne, Holl, Aalto, Ungers and Meier wherein each house is equipped with a home security system, another innovation I think that will improve the housing develepoer industry
In 2007, GA Sky Suites was launched and is due to be turned over to homebuyers in April 2012. The GA Sky Suites is a vertical housing project consisting of a 38-storey residential condominium strategically divided into a semi-circular residential building and a curvilinear corporate tower. It has four loft styles, which are the Podium Loft, the Garden Loft, the Sky Loft, and the Premiere units. In the same year of 2007 and in 2008, GA initiated its two flagship projects in Pampanga, namely Xevera Bacolor and Xevera Mabalacat respectively. Xevera Bacolor is inspired by Spain’s classical architecture.
It has transportation terminals and commercial areas, a wet & dry market, a church, a city town hall, a clubhouse with a pool, and a 34-classroom school built in partnership with the e-media program of ABS-CBN Foundation. Likewise, Xevera Mabalacat features a school, church, town hall, a wet and dry market, a clubhouse with an Olympic-size swimming pool, commercial areas, an amusement park, and a three-hectare eco park. With those fast changing and continuous improvements, GA was recognized as the Most Pioneering Responsive Developer during the Housing and Land Use Regulatory Board’s Real Estate Development Awards in 2007.
In 2009, the New Sta. Rosa Homes in Laguna and the Xevera Neo-Calapan in Oriental Mindoro were started. The New Sta. Rosa Homes is a four-hectare low-cost housing project, while Xevera Neo-Calapan is the third township project under GA’s Xevera brand. GA joined “The Bayanihan sa Calauan” project launched in May 11, 2009 in Laguna. The “Bayanihan sa Calauan” is a 107-hectare resettlement site project that supports the “Kapit Bisig Para Sa Ilog Pasig Movement” of ABS-CBN Foundation and the Department of Environment & Natural Resources.
Other partners in the project are Habitat for Humanity, National Housing Authority, Metropolitan Waterworks and Sewerage System, Pasig River Rehabilitation Commission, and Couples of Christ Foundation for Family and Life. In 2010, The Courtyard, GA’s first commercial project and Sameera, another GA housing project were launched in Angeles City, Pampanga. Further, Globe Asiatique has partnered with ABS-CBN, sponsoring and donating house & lot packages to the winners of Pinoy Big Brother, Pinoy Dream Academy, Little Big Star, and Wowowee’s “Pera o Bayong”.
GA has also renovated the ABS-CBN Foundation building estimated to be worth P50 million. The new building was launched in February 1, 2010. But not until May 2010, Pag-ibig discovered multiple deficiencies in the documentation of GA’s Xevera housing loans which started last 2007. The deficiencies include over 9,951 accounts from borrowers who denied getting any loan from Pag-ibig and another 1000 borrowers who could not be located. Results of the internal investigation also showed that the anomaly granted Globe Asiatique to avail itself of a funding commitment line of P6. 5 billion, which is 10 times higher than the amount other developers are allowed to participate through the Pag-IBIG housing loans. Back in June 20, 2008, Globe Asiatique entered into an agreement with Pag-ibig in response to the need to provide housing for self-employed workers, house-helpers, and OFWs. This also piloted the special memberships program through the Xevera project. Under the agreement, GA accordingly, was able to take-out loans amounting to a total of P7, 007, 806, 00 to fund its housing projects Xevera Bacolor, Xevera Mabalacat, and Sameera in Angeles City.
The Commission on Audit (COA) investigations revealed that nearly 300 people who borrowed from Pag-IBIG were bogus. Pag-IBIG also found out that about 1,400 are fake pag-IBIG members in Xevera, Bacolor and Mabalacat. As investigations deepened, similar controversies surfaced concerning GA’s Saint Monique Valaiz in Rizal and Chateau Condominium in Valenzuela. On Sept. 6, 2010, the Ombudsman formed the six-member “Task Force Pag-IBIG” to investigate the irregularities and to determine whether laws or regulations were violated, and to file criminal and administrative charges if necessary.
On the same day, Globe Asiatique withdrew its P3. 4-billion initial public offering (IPO) following the resignation of its underwriter, BDO Capital and Investment Corp. , after reports of its allegedly questionable loan transactions surfaced. Delfin Lee, president of Globe Asiatique, denied all the allegations surrounding the controversy. Pag-IBIG blacklisted Globe Asiatique and its officials in October 14, 2010. A few days after, in October 27, 2010, it also blacklisted its sister company, Filmal Realty Corporation.
Moreover, Pag-IBIG and the National Bureau of Investigation (NBI) filed 3 charges of syndicated estafa against Delfin Lee and GA’s other officers for allegedly using Pag-IBIG funds for questionable housing loans and bogus housing projects in October 29, 2010, December 10, 2010, and February 18, 2011. Also charged were a former CEO of Pag-IBIG Fund and a lawyer of Pag-IBIG’s Legal Department, who notarized the majority of the fake and/or fraudulent loans submitted by GA to the Agency. Before the incident happened, When Globe Asiatique’s credit lines with local banks ere used up, the plan to proceed with the Initial Public Offering (IPO) at the local bourse became more compelling. The IPO, scheduled for late 2010, was supposed to bring in about P3. 3 billion. But when the Pag-IBIG commotion happened, the IPO plan was shelved. Globe Asiatique cited “weak global market conditions” but there were also news reports that it was because BDO Capital, the underwriter quit. Because of the controversy that GA is now facing, its founder Mr Delfin Lee is now at risk. Before the incident, he was considered by many as a dreamer, a visionary, and an idealist.
In fact, Mr. Delfin Lee once were called by the Mabalacat, Pampanga Mayor Marino Morales as someone who had “the full measure of miracles requisite to a canonization”, but it didn’t lasts for long, Mr. Delfin Lee is now facing a controversy that may sentenced him life imprisonment together with his co-workers. As noted by ABS CBN news team, his story, is on the rise and fall of a businessman once dubbed by his friends as the “Donald Trump of the Philippines” and who has looked up to SM mall magnate Henry Sy and who once aspired to make Globe Asiatique the “SM of Philippine housing. ANALYSIS OF THE CASE Knowing that Globe Asiatique is a well-known company when it comes to housing industry, it is still apparent that GA fraudulently mismanaged the operations of the company. They used “ghost borrowers” just to obtain a huge funds for their projects located in the provinces, particularly in Mabalacat Pampanga. It was evidently proved by the auditors of Pag-IBIG namely Gloria Bautista and Nelin Paraiso who testified that they were able to detect the fraud through the internal audit systems of the said agency.
There were also some statements coming from employees of Globe Asiatique, they were used as “special buyers”, the term used by the firm to refer to a fake borrower, to obtain loans from the Home Development Mutual Fund or Pag-IBIG Fund and from private banks. It was expressly stated by Venissa Panem and Francisco Dela Cruz. In addition, according to Dela Cruz, he and his superior were able to produce more than a hundred of special buyers through that scheme.
In that scheme, employees name will be used by the said company, and with that, the company will be able to obtain a loan from Pag-IBIG since those special buyers were considered as prospective buyers of the said housing projects. It also became easier for GA to obtain a loan from Pag-IBIG, since GA is using the window 1 program of the Pag-IBIG, where it is the developer that receives, processes, and approves the housing loan of individual Pag-IBIG members after 2 years of continuing such transactions GA were able to obtain 9,951 accounts and were able to obtain 6. 5 billion worth of loan, which is 5 times than any other house developers. As stated by Mr. Delfin Lee,the CEO and also the founder of Globe Asiatique, his son Dexter Lee is the executive and finance vice president while his daughter Divine is the vice president for international sales and marketing, in that case it would be easier for the company to hide employee connivance.
In that way, they’ll be able to hide fraud without supervision from an independent objective individual inside the company due to close family relations which increases familiarity threat. Another problem I can say is the social responsibility being promulgated inside the company, though they provide rewards for TV shows, they are still stealing cash from other people through Pag-IBIG.
GA also lacks internal control inside its vicinity, almost all the employees were part of the anomalies circulating inside, especially in terms of obtaining loan from Pag-IBIG. There were also problems in Pag-IBIG for making transactions very fast, the controls for both Pag-IBIG and GA were both ineffective, that even a dead person or fictitious person will be able to obtain loan in the said house developers and from the said agency, since GA is using Window 1.
But according to the owner of the said house developer, there was a policy measures included in the window 1, such measures included buy-back options wherein the developer has the option to buy back the property after two years, and substitution or allowing new qualified members to borrow and purchase the properties secured under questionable circumstances to recover the loans. Because of ineffective controls, both the agency and the company faced a huge problem involving a huge amount of money worth 6. 5 billion. It is also apparent that the marketing strategy of Globe Asiatique is fast changing and fast developing which is the reason why they badly need huge amount of resources that even if there’s so many investors it wouldn’t still be possible for them to gain enough funds to complete the project within the designated time. There were a lot of improvements every year that the company’s resources and ability to meet its daily operations is being compromised.
Another problem is the anomalies circulating the agency and the house developers, it happened for two consecutive years where both officials of both entity’s involved were used to process all those transactions in an unblemished manner. There were collusions circulating between those two entities. RECOMMENDATIONS Connivance of employees is really apparent in the case of Globe Asiatique and Pag-IBIG. They were able to conceal the anomalies circulating between them for two consecutive years. And for that they were able to set a record of corruption that can possibly exist between a private corporation and a government agency.
To avoid the same thing again in the future, internal control should be the focus of every entity, to avoid fraud mismanagement inside an entity just like what happened to GA. An independent and competent auditor should be employed every year and if it’s not possible in sometime on a surprise basis to see if the internal control of the company is working effectively. And those internal control should be implemented by independent individuals inside the company to secure all the transactions coming in and out of the company.
Another thing is to avoid too much reliance on family relations, it increases familiarity threat; there should be an independent person between any family relations inside a company to avoid conflict of interest. There should also be segregation of duties between them; there should be an intermediary between them, where one should not report directly to his or her relatives inside a company. Since employee collusions are also prevalent in the case of GA, any entity should employ a competent individual that could stand for his principle, and each employee should be directly supervised by their superiors.
In the case of GA if one person would stand and would report what’s happening inside the GA, GA will not suffer as much as today. Since Globe Asiatique is known for its best amenities at low priced through its well-known marketing strategy, it shouldn’t let itself be compromised by offering more than what they can actually afford. Since they were compromised they were forced to look for more funds that their investors cannot give. They want more funds to generate more projects that they cannot meet on time, because they want to gain competitive advantage.
They should first focus on what they can do to strengthen customer’s loyalty and not on too much expansion that they cannot handle effectively. Since in the controversy faced by GA, employees were directly involved, any entity should stress and implement a strong internal control, strong corporate social responsibility, strong corporate ethics and most vital the employee trainings for self-improvement, to avoid and prevent fraud in any entity, because it only takes few persons to stand for the right things to do and it will make a difference, a huge difference.
Case Study for Globe Asiatique. (2017, Dec 06). Retrieved from https://paperap.com/paper-on-case-study-for-globe-asiatique-351/
