Calata officers ordered to pay P8 million for market manipulation

MANILA, Philippines — Calata Corp., the delisted agribusiness firm of self-made businessman Joseph Calata, has been found guilty of market manipulation by the Regional Trial Court of Makati City, with its officers sentenced to pay fines totaling P8 million.

In a statement, the Securities and Exchange Commission (SEC) said the Makati RTC has promulgated a decision dated May 28 finding officers of Calata guilty of violations of the Securities Regulation Code (SRC).

The commission said the company’s officers were fined “for making misleading and exaggerated statements about its supposed Mactan Leisure City project, thereby inducing the public to buy the company’s shares in 2016.”

Calata chairman, president and chief executive officer was found guilty beyond reasonable doubt of two counts of violation of Section 24(d) of the SRC, while the firm’s corporate secretary, compliance officer and corporate information officer Jose Marie Fabella was found guilty of two counts of violation of the same law.

Calata and Fabella were sentenced to pay fines amounting to P4 million each, or to serve time in prison should they fail to pay the fines on account of insolvency. 

The case with respect to Sino-America Gaming Investment Group LLC CEO Michael Foxman, meanwhile, was archived.

Foxman was charged with the same violations but remained at large.

Sino-America Gaming Investment Group was Calata’s partner for the Mactan Leisure City project.

The SEC filed a criminal complaint against the company back in 2017 for issuing false and misleading statements that it would put up a gaming and leisure complex in Cebu City.

According to the commission, it started monitoring the market activities of the firm amid a sudden surge in the daily trading volume of its shares on the Philippine Stock Exchange (PSE) on August 23, 2016.

The company had disclosed to the PSE its partnership with Sino-America
Gaming and Macau Resources Group for the development of a $1.4 billion integrated resort and casino project called Mactan Leisure City.

As a result, the SEC said trading volume in Calata shares surged by 2,455 percent on the same day the subject disclosures were made, followed by a 196.41 percent jump in the next trading day.