MANILA, Philippines — The Shareholders’ Association of the Philippines Inc. (SharePHIL), a group of minority stockholders in the country, has asked the Securities and Exchange Commission (SEC) to investigate stock market transactions made by directors, officers, and other insiders of Calata Corp. (Calata).
Calata, founded by businessman Joseph Calata, is a distributor and retailer of agricultural products.
In a letter to the SEC dated Feb. 8, SharePHIL alleged that Calata did not disclose material information when it suffered a P126 million casualty loss caused by a typhoon in the fourth quarter of 2016.
“The casualty loss was not promptly disclosed to the public as required by the Securities Rules and Regulation (src) and disclosure rules of the Philippine Stock Exchange (PSE), but mentioned only in Calata’s audited financial statements dated April 26, 2017 as part of its 2016 annual report and was disclosed to the public only on May 2, 2017,” SharePHIL said.
Sought for comment, Calata told The STAR that the revenue generated by its property damaged by the typhoon constituted only one percent of the total revenue of Calata Corp.
“Moreover such loss did not have any mpact whatsoever on the net profit of the company for 2016 which even increased compared to 2015 in spite of all accusations being thrown against the company,” he said.
SharePHIL explained that after this unreported casualty loss, Calata, the president and CEO, disposed and sold a total of 108.602 million shares valued at P277.4 million. The sale of the shares happened in a series of transactions starting in the fourth quarter of 2016 until the first quarter of 2017.
SharePHIL president Francis Lim said the move is part of the group’s efforts to build public confidence in the stock market.
“The request for inquiry reflects SharePHIL’s desire to help our government build integrity and public confidence in our stock market as a means of developing it to make it more competitive with the rest of the region,” Lim said.
Lim, a known corporate lawyer, said the src and PSE disclosure rules require that material information regarding a publicly listed company be disclosed within 10 minutes from the time a listed company learns of it.
“This rule aims to ensure a level playing field in the stock market to prevent insiders from taking undue advantage of the investing public in the trading of the company’s shares,” Lim said.
SharePHIL pointed out that Calata’s stock price continuously went down to P1.86 in May 2017 from P3.49 per share on Oct. 3, 2016 when its audited financial statement was disclosed as part of the company’s 2016 annual report.
Lim said the casualty loss, was a material development for the company because its “revenue comes primarily from the sale of agricultural products.”
“We trust that after its investigation, the SEC will take appropriate actions as may be warranted against those whom it will find responsible,” Lim said.