Cityland denies report

Listed property firm Cityland Development Corp. denied yesterday a report that it is being probed by the Securities and Exchange Commission over its capability to pay off borrowers of its so-called non-recourse debts.

"Please be informed that this news is a surprise to us since there is no investigation by the Securities and Exchange Commission in our company regarding this matter," CDC senior vice president Rufina Buenseceso told the Philippine Stock Exchange.

Quoting government sources, The STAR reported that the SEC, among with the Bangko Sentral has initiated an investigation into the borrowing and leading activities of CDC due to rising apprehensions by the holders of its non-recourse debts.

Non-recourse debts are high-yielding commercial papers floated by borrowing companies to raise money for their projects. Although they earn high interest rates, investors in non-recourse debts are not given the guarantee of full recovery of their investments from the borrowing firms.

The government's move was an offshoot of the similar failure of Westmont Investment Corp. to service over P7 billion of its debts.

Amid this controversy, CDC stocks were prominent during yesterday's trading as its price closed 50 percent or P2 higher at P6 each. Aside from bucking the general market trend, CDC was the top gainer and was forced into a trading halt having reached the mandatory ceiling of 50 percent. --