The Pharmally scandal first came to light in July 2020 when its auditor, Deloitte Taiwan, received a complaint on alleged financial shenanigans in the company involving owner and CEO Tony Huang.
According to a report by Taipei Times, Huang was accused of embezzlement or using equipment from Pharmally’s Chinese subsidiary as collateral for a personal loan of NT$700 million (P1.186 billion).
Huang was also accused of allegedly colluding with Deloitte & Touche Taiwan to forge Pharmally’s financial statements since 2018 to show that its Chinese subsidiary was not losing money.
The unfolding scandal led to the resignation of Pharmally’s top executives, including its chief financial officer, spokesman, and head of internal control, in early August 2020.
On 18 August 2020, the Taiwan Stock Exchange (TWSE) suspended trading of Pharmally after it failed to submit its second quarter financial statement. Pharmally, which was listed in the TWSE in 2015, was eventually delisted in April 2021.
A few days later, Taiwan authorities issued an international warrant, valid for 37 years, for Huang due to alleged stock manipulation, fraud in financial statements, and illicit transfers of company assets. Taipei Times claimed that Huang has not been seen in Taiwan since August 2020.
The Pharmally scandal cost three big real estate investors at least NT $2.2 billion (P3.97 billion) in losses.
Huang’s son, Huang Tzu Yen, was also issued an arrest warrant on 29 December 2020 for alleged securities fraud totaling about NT$1.5 billion (P2.7 billion), according to Senator Risa Hontiveros.
While the Pharmally scandal was shaping as one of the biggest financial scandals involving a Taiwanese listed company, Huang was cornering the bulk of the medical and supply contracts awarded by the Duterte administration in the middle of the 2020 pandemic.
From April 14 to June 10, 2020, Lao awarded Pharmally with roughly P8 billion worth of supply contracts, including PPES and face shields that were allegedly overpriced. Lao, who resigned in June 2021, admitted that he did not exercise due diligence in vetting Pharmally whose local subsidiary was formed in September 2019 with a P625,000 paid-up capital.
Pharmally was awarded another P774 million medical supply contract on 2 June 2021 before Lao resigned.
Tony Huang was introduced to President Rodrigo Duterte in a meeting in Malacanang in 2017 by Presidential Business Special Consultant Michael Yang.
Hontiveros claimed that Yang’s business partner in Full Win Group, Zheng Bingqiang, was also wanted in Taiwan for his involvement in the Pharmally stock manipulation scandal.