THE SECURITIES and Exchange Commission has slapped businessman Roberto V. Ongpin with a P174-million fine for “insider trading” ahead of a bidding war for Philex Mining shares in 2009 – a charge which the businessman plans to refute in court.
In an en banc ruling dated July 8, Ongpin was ordered to pay a fine 10 times larger than an original P17.4 million penalty recommended by the SEC’s enforcement and investor protection department (EIPD).
The SEC accused Ongpin, then a minority shareholder of Philex, of gaining from material non-public information. The corporate regulator noted Ongpin’s purchase of additional shares of Philex ahead of a Dec. 1, 2009 deal entered into by Hong Kong-based First Pacific Co. Ltd. to buy into the mining firm.
The corporate regulator took note of the heavy trading of Philex shares prior to the First Pacific deal as investors speculated on a bidding war.
“In this case, appellant was able to consolidate the required number of shares, supplementing his block of shares with the shares brought from the open market, sold them to the subsidiary of First Pacific at the privately agreed price of P21 per share, thereafter giving the First Pacific group control over Philex,” the SEC said.
Ongpin never denied having possessed this information but only refuted the nature of such being “insider information,” the SEC said.
“In fact, the public cannot be aware of the sale of shares to the subsidiary of First Pacific considering that it was reported that there was a bidding war between Manuel V. Pangilinan and Ramon Ang of San Miguel Corp.; it was further reported that GSIS (Government Service Insurance System) was also building up its stake in Philex by accumulating more shares therein. Thus, would it be reasonable to presume that the public should have divined/foreseen that appellant would at a certain date sell to the First Pacific group at a premium price of P21 per share? Definitely not as the material information was kept very much private and non-public considering that Ramon Ang of San Miguel Corp. and the GSIS were likewise building up their respective stake in Philex,” the SEC said.
Asked for his side, the office of Ongpin said the businessman was currently out of town, but sent a statement from his legal counsel vehemently denying the SEC’s charges.
“Mr. Ongpin intends to appeal this case, for total lack of merit, to the Court of Appeals,” the statement said.
Ongpin’s legal counsel noted that this was the same Philex Mining case which was originally filed at the Sandiganbayan by the Ombudsman as a behest loan case.
“Twice the Sandiganbayan quashed the case for lack of evidence. The Ombudsman tried to allege that the behest loan to Ongpin had caused damage to DBP (Development Bank of the Philippines) when in fact and in truth, DBP benefited to the extent of P1.4 billion in this case,” the counsel said.
“This particular case now has been shifted by the SEC to an insider trading case, but in no way can this case be called insider trading. The jurisprudence is clear on that,” the statement added.
The legal counsel also pointed out that the case had been filed almost a year after the two-year deadline required in the Securities Regulations Code.