Calata may face criminal complaints

MANILA, Philippines — The Securities and Exchange Commission (SEC) is conducting its own investigation on troubled listed agricultural company Calata Corp., its top official told The STAR.

SEC chairperson Teresita Herbosa said depending on the results of the investigation, the SEC may file criminal complaints against the owners and officers of Calata led by its founder, businessman Joseph Calata.

“The investigation is still ongoing. Whether we will file a criminal case, that has to be determined by the (SEC) en banc. I don’t know yet the results of the investigation but the procedure is the Enforcement and Investor Protection Department will be the one to recommend to the en banc the filing of a criminal complaint,” Herbosa said.

Herbosa declined to confirm whether or not this is related to same issues raised against Calata by the Philippine Stock Exchange (PSE), which pertain to the company’s failure to disclose material transactions it implemented since October last year.

“As of now, I cannot disclose yet which one, but there are a number of pending matters before the department,” Herbosa said.

The SEC is expected to make an announcement of its decision soon. 

Insiders said there is already a recommendation to file a criminal case against Calata, but officials would not immediately confirm this.

Calata is likewise facing delisting after the PSE said the company violated PSE’s disclosure requirements.

In all, the PSE counted 55 violations of PSE disclosure rules from Oct. 6, 2016 to June 20, 2017.

Specifically, the PSE said Calata did not make the appropriate disclosure of its disposition of shares by the company’s directors and principal officers. It also did not provide updates of previous disclosures on material information that may affect investor decision.

The PSE first suspended the trading of Calata shares prior to initiating delisting procedures.

“The PSE also found Calata to have violated the blackout rule which prohibits directors and principal officers who have obtained material non-public information to trade their company’s shares within a prescribed period.  The blackout rule is in place to provide a fair market environment to the investing public by disallowing the possible trading of company insiders using non-public information that they may have access to by virtue of their position in the company,” the PSE said in its findings.

The local bourse has yet to announce when Calata’s delisting would commence. It has already concluded the hearings and its investigation on the matter.

However, Calata said his company would not be able to make a tender offer to minority shareholders, saying that this would send the company to bankruptcy.

Instead, he said he would exchange the company’s shares for crypto currencies.

Company insiders said this plan is very simple and provides minority shareholders a way out and a way for them to liquidate their shares.

The same sources said the plan also does not need the approval of the SEC and PSE because they do not regulate crypto currencies.

Calata did not respond to texts and calls made through his mobile phone.

He said last week that minority shareholders could have the option to trade their shares on the global digital currencies market -- bitcoin, ethereum, and ripple.

This is not the first time Calata was mired in a stock market controversy. In 2012, the year it went public, the company’s name was also dragged in stock market manipulation.