SEC affirms P2M fine vs NOW Corp., CEO
MANILA, Philippines — The Securities and Exchange Commission (SEC) upheld its decision to slap a P2-million fine on broadband and technology company NOW Corporation (NOW Corp.) and its CEO Mel Velarde for allegedly giving “misleading disclosures”.
According to the five-page order dated February 16, the SEC’s Enforcement and Investor Protection Department (EIPD) denied the company’s request for reconsideration of the alleged violation of Section 24.1(d) of the Securities Regulation Code (SRC).
“WHEREFORE, premises considered, the REQUEST FOR RECONSIDERATION dated 03 July 2023 filed by NOW CORPORATION and MR. MEL V. VELARDE is hereby DENIED for lack of merit,” SEC’s order read.
The case concerns the alleged misleading disclosures of the firm’s P2.6-billion unpaid obligation to the Philippine government, which prompted the SEC to fine NOW Corp. and Velarde P1 million pesos each last year.
Section 24.1(d) of the SRC prohibits a firm from issuing false or misleading disclosures.
(d) To make false or misleading statement with respect to any material fact, which he knew or had reasonable ground to believe was so false or misleading, for the purpose of inducing the purchase or sale of any security listed or traded in an Exchange.
According to the SEC, the case stemmed from the Nov. 11, 2021 disclosure made by the firm and Velarde stating they did not know the details surrounding the motion filed by the National Telecommunications Commission with the Supreme Court, which seeks a resolution regarding NOW Telecom’s P2.6-billion liability representing unpaid supervision and regulation fees and spectrum user fees.
SEC also said that the firm and Velarde “cannot simply deny” that were were unaware of the details of the motion filed by the NTC.
“To be simply dismissive about it and to nonchalantly disclose that ‘The company has no knowledge of the specific details surrounding the alleged Motion field by the [NTC]...’ created a misconception to the investing public,” the SEC’s order read.
“In this connection, it is clear that there was a concomitant failure on the part of NOW Corp. and Mr. Velarde to make full, accurate and timely disclosure of a material fact or information about securities as mandated compliance to a listed company constitute a violation of Section 24.1 (d) of the Securities Regulation Code,” it added.
In response, NOW Corp. said that it disagrees with the SEC order.
“The Company disagrees with the Orders of the EIPD and has referred the matter to its legal counsel to appeal the same to the SEC en banc,” NOW Corp’s disclosure dated February 22 read.
Philstar.com reached out to NOW Corp. for a comment about the issue, but the company has yet to reply.
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