PSE allows trading in Gatchalian firms’ shares but maintains close watch

MANILA, Philippines—The Philippine Stock Exchange lifted on Friday restrictions on the trading of shares of six companies affiliated with the group of Filipino-Chinese businessman William Gatchalian that were imposed three years ago pending an investigation into alleged trading irregularities.

In a memorandum dated January 19, the PSE said the trading restrictions on Acesite (Phils.) Hotel Corp. (ACE), Forum Pacific Inc. (FPI), Mabuhay Vinyl Corp. (MVC), Philippine Estates Corp. (PHES), Waterfront Phils. Inc. (WPI) and Wellex Industries Inc. (WIN) that had been imposed in 2009 were now lifted. But the PSE added that all trades involving these companies’ shares would still be subject to its “close watch.”

Mabuhay Vinyl is not officially part of the Wellex group but the Gatchalians’ sixth listed company Metro Alliance Holdings and Equities Corp. was listed among its top 100 stockholders at the time the restrictions took effect.

“The lifting of the trading restrictions is conditioned on the companies’ and its (sic) related entities’ continuing maintenance of only one account with Westlink Global Equities Inc. for the purpose of trading PSE-listed shares,” PSE president Hans Sicat said in the memorandum.

Westlink is the stock brokerage house affiliated with the group.

Sicat added that the lifting of the restrictions would be “without prejudice to any action that may hereafter be deemed necessary by the Exchange in accordance with existing laws and rules in case of any violation of the PSE rules and in order to maintain and preserve an efficient, fair and orderly market as mandated by the Securities Regulation Code.”

In February 2009, the PSE and its clearing and settlement subsidiary, Securities Clearing Corp. of the Philippines, tightened the trading rules on these six companies. They required an early delivery of securities or cash on trades of stocks of these six companies, saying they did not wish to “unnecessarily expose our stock market to clearing and settlement risks as that would compromise the integrity of our market.”

Citing the need to protect public interest, the PSE had earlier required those who traded the shares of these companies to make sure that the trades were ready for electronic settlement from day one instead of the usual three-day settlement period in the local bourse.