PSE official inhibits self from BWRC probe

The chairman of the business conduct & ethics committee (BCEC) of the Philippine Stock Exchange (PSE) has inhibited himself from the committee that will determine and possibly recommend sanctions on property and gaming firm BW Resources Corp. (BWRC), currently being probed by the Senate committee on banks and financial institutions for possible stock trading violations, including insider trading and stock manipulation.

Citing possible conflict of interest, PSE president and chief executive officer Jose Luis Yulo Jr. said Federico Lim, who is the uncle of BWRC president Eduardo "Moonie" Lim Jr., chose to temporarily inhibit himself from the BCEC. Lim Jr. is also the son of Eduardo "Ed" Lim Sr., chairman emeritus of the PSE.

Yulo said the BCEC chairmanship was given back to outgoing PSE chairman Trinidad Kalaw who was BCEC chairman until Lim assumed the post last year.

The BCEC will be the committee that will receive the results of the investigation of the PSE compliance and surveillance group (CSG). The BCEC will then determine, based on the conclusions and recommendations of the CSG, what actions will be taken on BWRC.

"The BCEC is in effect, the jury and the judge, because it will determine the kind of action or penalties or sanctions needed to be imposed, based on the findings of the CSG," Yulo said.

The other members of the BCEC are Yulo who sits in the committee in an ex-officio capacity but has no voting right, non-broker Vicente Jayme Sr., former trade and industry secretary; Robert Coyiuto, Edgardo Guevarra, Felipe Yap, Harry Yu, Trinidad Kalaw and Lim, who has inhibited himself in this case.

The withdrawal of Lim from the BCEC was expected as the PSE is about to end its investigation of BWRC and is scheduled to submit its findings to the Securities and Exchange Commission (SEC) on Feb. 10 or 11.

The public, however, will not know immediately the results of the investigation. Yulo said the results will not be made public.

"We are bound by rules of confidentiality. We are allowed to disclose it directly to the SEC or any other body authorized by the law."

Yulo described the "traffic flow" of PSE's investigation into BWRC. He said the PSE is guided by the rule book o the listings and disclosures of the exchange.

He said the CSG will initially handle issues or complaints. It will conduct a fact-finding activity, evaluate results and make its conclusions and recommendations which will then be turned over to the BCEC for action and disposition, and then to the Board of Governors for confirmation and notation.

Yulo said that the buck stops at the BCEC whose findings will be submitted to the SEC after being ratified by the PSE Board of Governors.

"The Board of Governors do not have a real say in the BCEC findings, they will simply ratify the conclusions," Yulo added. -