Philippine Stock Exchange, Bonifacio Global City. INQUIRER PHOTO/LYN RILLON
MANILA, Philippines — Abra Mining and Industrial Corp. will be involuntarily delisted from the local bourse after the Securities and Exchange Commission (SEC) found that the company and some of its officials had illegally sold unlisted shares from 2015 to 2019.
In a statement on Tuesday, the Philippine Stock Exchange (PSE) explained that it was “left with no alternative” but to initiate involuntary delisting and maintain the trading suspension on Abra Mining’s shares.
Trading of Abra Mining’s shares has been suspended since March 4, 2021 due to the controversial sale of shares.
The PSE’s delisting rules indicate that an involuntarily delisted company cannot apply for relisting within five years from delisting. Directors and executive officers are likewise disqualified from becoming part of any company applying for listing within the same period.
READ: Abra Mining officials, agents fined P560M for bogus shares
But it also means that the minority stockholders and passive investors will be stuck with illiquid shares. Even if they can sell their shares outside the PSE trading system, those over-the-counter transactions will be subjected to a higher capital gains tax.
The PSE advised the minority stockholders of Abra Mining to consult their legal counsels on available remedies under existing laws.
Financial consumers’ protection
Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act, protects financial consumers against “fraudulent practices and provides them with an expeditious remedy for enforcement of claims.”
According to the PSE, the SEC has the authority to decide on complaints under the law, such as awarding of damages worth up to P10 million.
In three separate decisions dated April 8, the SEC Markets and Securities Regulation Department found that Abra Mining’s shares lodged with the Philippine Depository and Trust Corp. (PDTC) had way exceeded the number of shares listed on the local bourse. The PSE requires that all fully paid issued and outstanding shares must be applied for listing.
READ: SEC, PSE digging deeper into Abra Mining case
Shares of Abra Mining lodged with the PDTC totaled 258.957 billion, but only 72.746 billion were listed.
The SEC earlier revoked Abra Mining’s registration statement and certificate of permit to offer and sell securities. The involved parties, including president James Beloy; directors Premy Beloy and Joel Beloy, and stock transfer agent Asian Transfer & Registry were fined between P400,000 and P47.4 million each.
For its part, Abra Mining claimed that its former president, Jeremias Beloy, “and unknown cohorts” were behind the fraudulent registration and listing of shares.
Jeremias Beloy had served as president and CEO when the illegal sale and trade of shares occurred, Abra Mining said.
“The answering respondents faithfully and diligently fulfilled their duties and obligations as officers of the corporation from 2015 to the present,” it added. INQ