No final report yet on BW stock manipulation probe

The much anticipated release of the final report on the BW Resources probe did not push through last Friday, leaving brokers still guessing as to the fate of parties allegedly involved in manipulation and anomalous transactions.

"I have not seen the report yet," Philippine Stock Exchange chairman Trinidad Kalaw told reporters after a four-hour caucus by PSE broker-members at the PSE-Ayala Tower Friday night.

Kalaw said she does not know whether the report has been released since PSE president Jose Yulo has yet to call her up.

"Even (Securities Exchange Commission) chairman (Perfecto) Yasay called me up to ask about the report," she said.

The 15-member PSE Board of Governors, which she chairs, was supposed to have acted on the final report before forwarding it to the SEC last Friday.

Earlier, the PSE's compliance and surveillance group (CSG) had committed to submit its findings, conclusions and recommendations on the highly erratic price movement of gaming stock BW by the end of Friday's working hours, a good 26 days ahead of the 90-day deadline set by the SEC.

Yulo, who was not present at the caucus, was reportedly holed up with the PSE's business conduct and ethics committee (BCEC), another layer in the Exchange hierarchy through which the CSG report must pass before its release.

Based on the PSE rule book, the final report should be handed over solely to the president, who may either veto the report or endorse it to the BCEC for action and disposition. The BCEC then confirms the report's findings and the actions recommended.

In case the BCEC decides to slap sanctions on erring brokers involved in anomalous transactions, the affected parties may ask for reconsideration within a 10-day period. If given due course, then the BCEC can direct the CSG to conduct further investigation or reverse the decision.

If the BCEC denies the motion for reconsideration, the report will be endorsed to the SEC for violations, particularly in areas where the PSE has no authority to impose penalties. The SEC will review the report and the recommendations, and order sanctioned parties to comply.

BW share prices skyrocketed from less than P2 per share at the start of last year to a peak of P107 in November shortly before Macau gambling mogul Stanley Ho visited the country.

Ho has invested in BW which has elected him its chairman. The biggest shareholder, however, is Dante Tan, a close friend of President Estrada.

BW share prices plummeted on the day Ho left Manila after a three-day visit. They are now worth less than P8 apiece.

Stockbrokers have insisted that the entire investigation process be "totally transparent."

"This provides a golden opportunity to clean our ranks," said one broker. "If some of our members are indeed found guilty, they cannot get away with it because the whole world is watching."

The source expressed concern that some members of the "old boys' club," which is made up of influential stockbrokers, might be dragged into the controversy and consequently wield their power to exert pressure on probers.