Benguet won't contest PSE order

MANILA, Philippines - After initially receiving a letter on Nov. 5 from the SEC’s Corporate Finance Department upholding Benguet Corp.’s (BC) explanation supporting its position that it had not violated disclosure rules, the company announced with deep regret that the Securities and Exchange Commission (SEC) wrote Benguet that it will allow PSE to implement its previous decision to penalize the 106-year old publicly listed mining company.

Benguet has decided to accept the PSE order.

Although the company continues to strongly maintain its belief that there was yet no obligation to disclose the mere receipt of individual notices of default as transmitted by the trustee for its outstanding debts based on the circumstances and the provisions of its restructuring agreement with its creditors and also considering the disclosure rules of the PSE as presently written.

Benguet was unsuccessful in obtaining a dialogue with the PSE and SEC that it had asked for and sought in order to clarify the issues for a better understanding of all parties.

Benguet’s position appears to be supported by a letter clarification from the trustee-Philippine National Bank-that clearly states the company has not been declared in default.

The loan agreements provide for certain processes which include a requirement that majority of creditors of record should declare and collectively send a formal declaration of default.

In fact a validation process is ongoing to determine who the creditors of record are in view of several transfers under the SPAV Law.

Management reportedly reviewed and deliberated and obtained legal opinions supporting its position, which it submitted to the PSE, to determine its disclosure obligations when the mere individual notices were received.

Related to this, Benguet very recently made an offer for settlement of all its debts.

Moving forward, Benguet will no longer contest the PSE ruling in order not to distract it from pursuing the development of several attractive and viable mineral properties in gold, nickel, copper and coal which should lead the company to a very strong recovery.

In addition Benguet hopes that this unfortunate incident will serve as a catalyst for the PSE and the SEC to review and if need be reconcile to make clearer some of the current disclosure rules especially those covering financial instruments as they relate to specific financial products, and their terms considering the ordinary course of business operations.

The lack of clarity could lead to misunderstanding and may put other listed companies at risk despite good faith in trying to understand the rules.

Benguet affirms its commitment to the PSE’s policy of full disclosure and will support all efforts that may be undertaken to precisely strengthen the Bourses capacity to improve and ensure transparency.