SEC upholds Calata delisting Business world



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By Arra B. Francia, Reporter

The country's corporate regulator strengthened the decision of the Philippine Stock Exchange (PSE) to remove the Calata Corp agribusiness from the local bourse, due to violations of trade rules and disclosures.

In a statement issued Monday, en banc's Securities and Exchange Commission (SEC) confirmed the PSE's decision on November 3, 2017 to abolish Calata and imposed a continuous ban on the Chairperson, Chief Executive and President Joseph H. Calata from becoming a director of the company registered.

Officials of agribusiness companies, namely Jose Marie E. Fabella, Halmond Parker R. Ong, Melvin H. Calata, Johnny L. Uy, Edmund M. Solilapsi, and Conrado C. Zablan, will also be disqualified from becoming directors and / or executive officers of companies registered for a period of five years after the delisting procedure.

"Other directors, even if they are not illegally traded or fail to disclose, can also be held accountable because they bind themselves to ensure that Calata will not violate the PSE Disclosure Rules. This task is echoed in the Record Agreement between Calata and PSE, "according to the SEC's decision.

Wanted for comments, Mr. Calata questioned the SEC's decision and its capacity to protect investing communities.

"If the SEC thinks that the public, which has a majority stake, must be punished by alleged one action, is that in harmony with its vision that the SEC is the champion of investor protection?" Mr. Calata said in a text message.

PSE ordered the revocation of Calata back in 2017 due to repeated violations of the PSE Disclosure Rules and Delisting Rules. The Exchange calculates 29 different violations from Section 13.1 of the PSE Disclosure Rules because of the company's failure to disclose changes in share ownership of its directors and key officials.

Point C, Section 13.1 of the PSE Disclosure Rules states that directors and key officials of registered companies must disclose "acquisitions, releases or changes" in their share ownership to PSE within five trading days.

Calata is also known to have committed 26 violations of Section 13.2 of the same rules, otherwise known as Extinguishing Regulations. This means that officials or directors trade shares in Calata during periods of blackouts, where only those who know material information can affect the company.

Under PSE rules, company officials are not permitted to trade shares in their own company for up to two full trading days after price sensitive information is disclosed.

Mr Calata was also found to have delayed disclosure of some Calata stock trading from November 2016 to March 2017 and from April to June 2017. The first set of trades was disclosed on June 23, 2017, far beyond the five trading days needed, while the second set was revealed on July 27 2017 .

The SEC noted that Mr. Calata itself "consistently recognizes that trade is executed when they have material non-public information and that there is a failure to disclose the same to PSE."

Meanwhile, the SEC decided that PSE could not force the company to repurchase Calata shares owned by the public, given that it did not have enough retained earnings balance to make a tender offer.

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