THE Philippine Stock Exchange (PSE) is addressing investor concerns especially those related to listed issues, according to First Grade Finance Inc. managing director Astro C. del Castillo.
Del Castillo was reacting to a question during the Experts Forum on Finance and the Economy regarding the status of Abra Mining and Industrial Corp., which was suspended last March 3, 2021, for selling unregistered shares in the stock market. The forum held at the DWIZ station was sponsored by the ALC Media Group.
He said that the PSE is aware of the issue, which dampens investor appetite. He also cited other investor concerns like the deferment by Dito CME Holdings Corp. of its stock rights offering where investors’ money were returned, as well as recent IPOs (initial public offering) in the market .
Many investors in Abra Mining, which had an explosive run before the findings on the sale of unlisted shares was made, are now facing the prospects of frozen investment money and they are asking what happened to the initial announcement of the PSE that the exchange is looking for a white knight.
The PSE has been granted a self- regulatory status by the Securities and Exchange Commission whereby it is supposed to police its ranks. A withdrawal of that status will revert it back to the regulatory control of the Securities and Exchange Commission.
On its own the SEC can “motu propio” probe the sale of unlisted stocks by officials of Abra Mining, traded under the symbol AR. The current chair, Emilio B. Aquino had headed the prosecution department of the SEC during what has been dubbed as the golden age of the SEC under the late Chairperson Rosario N. Lopez when the commission was winning court cases.
The trading of Abra Mining shares, including the unlisted shares, rose in January last year as investors bought into the stock.
Abra Mining had accounted for 77 percent of the market’s daily trading before the stock’s March 4 suspension where the PSE notified the “investing public that, in view of the lodgment and trading of unissued and unlisted shares of Abra Mining (“AR” or the “Company”), trading of AR shares “ (was) suspended effective 9:00 a.m., March 4, 2021, until further notice.
Based on the disclosures and reportorial submissions by the Company and reports by the Philippine Depository and Trust Corp. (PDTC) on the share lodgments of AR, the PSE has determined that:
1. The number of the company’s fully paid issued and outstanding shares exceeds the number of its listed shares, in contravention of PSE’s rule that all fully paid issued and outstanding shares should be applied for listing;
2. The number of the company’s shares lodged with the PDTC exceeds the number of the Company’s listed shares, in contravention of PSE’s rule that only securities approved for listing should be lodged with PDTC for trading; and
3. The number of the company’s shares lodged with the PDTC exceeds the number of the company’s issued and outstanding shares (as contained in the Company’s audited financial statements) which means that shares which are not yet reflected in the books of the company have been lodged with PDTC and are being traded, in contravention of the provisions of the Revised Corporation Code.
The Exchange, in close coordination with the SEC, has decided to suspend the trading of AR shares until the above matters are satisfactorily resolved by the company’ s directors, officers, corporate secretary, and its stock and transfer agent (Asian Transfer & Registry Corp.). This is pursuant to the Exchange’s mandate and objective to provide a fair, orderly, efficient and transparent market for the trading of securities and for the protection of the investing public, consistent with the provisions of the Listing Agreement and the Consolidated Listing and Disclosure Rules.