The Philippine Stock Exchange (PSE) has ordered a one-month suspension on the trading of shares of agricultural products distributor Calata Corp., citing multiple violations on disclosure requirements.
The PSE said Calata, among others, failed to disclose on time the sale of shares of its principal officers.
The PSE also found Calata to have violated the “blackout rule,” which prohibits directors and principal officers who have obtained material information from trading their shares within a prescribed period. The blackout rule provides the investing public a fair market environment by disallowing insider trading.
The suspension of trading on the Calata shares started on June 30 at 2:20 p.m., the PSE said in a memorandum.
The PSE said Calata had violated the “unstructured” disclosure requirements for the third time.
“Unstructured” disclosures refer to communication of company developments to the investing public as they occur and as may be necessary.
The PSE sets the following standards and tests in determining whether disclosure is necessary: the information must be necessary to enable the issuer and the public to appraise their position and standing; the information must be necessary to avoid the creation of a false market; and the information may reasonably be expected to affect market activity and price of securities.
The listed company is required to disclose to the PSE within 10 minutes from the receipt of such information or development. The PSE also requires that disclosure must be made prior to its release to the media.
“We would like to assure the investing public that the Exchange upholds strict compliance to our disclosure rules for the protection of investors and to maintain a fair and orderly market. The parameters for timeliness of disclosures have been put in place precisely for these reasons and any violation will need to be dealt with accordingly consistent with our rules,” PSE president and chief executive Ramon Monzon said in a press statement Saturday.
First violation of the disclosure rule carries a fine of P50,000 while the second violation will result in a fine of P75,000. The third violation will trigger a trading suspension for a period of one month.
A fourth violation will then be a ground for delisting.
“The imposition of said monetary penalties and trading suspension is without prejudice to any further regulatory action that may be undertaken by the Exchange in connection with the above violations,” the PSE said.
It said there must be full, fair, timely and accurate disclosure of material information from all listed companies. The information must also be correct, factual and clear as well as sufficient to enable the public to make informed investment decisions. The information must also be disseminated through the PSE so that everyone has equal access to the information.
Calata has three operating segments: distribution, retail, and farming. It distributes agro-products, animal feeds, fertilizers, agro-chemicals, seeds, soya, meat, and swine livestock. Its retail operation is carried out through Agri Phil Corp., which trades feeds, agrochemicals, veterinary medicine, fertilizers and seeds. In the farming segment, it has a swine livestock breeder farm, broiler breeder farm, broiler growing farm and swine livestock growing farm. It has started the construction of its first greenhouse farm in Mendez, Cavite.