SEC files criminal complaint vs Calata

MANILA, Philippines — The Securities and Exchange Commission (SEC) has filed a criminal complaint against agricultural firm Calata Corp. for issuing false and misleading statements that it would put up a gaming and leisure complex in Cebu City.

The Securities and Exchange Commission (SEC) yesterday filed before the Department of Justice (DOJ) a criminal complaint against agricultural firm Calata Corporation for allegedly issuing false and misleading statements that it would put up a gaming and leisure complex in Cebu City. 

In its 14-page complaint-affidavit, the SEC named as respondents Calata Corp., located at MacArthur Highway, Banga 1st Plaridel, Bulacan; and its officers and directors namely the company chairman of the board, president and chief executive officer Joseph Calata, corporate secretary Jose Marie Fabella, chief financial officer Benison Paul de Torres, Conrado Zablan, Johy Uy, Halmond Parker Ong, Edmund Solilapsi, Michael Foxman and other unidentified respondents. 

Calata is a stock corporation registered with the SEC and was issued with a permit to publicly offer and sell securities.

In its complaint, the SEC said it is formally charging the respondents for allegedly committing market manipulation, “for making and issuing and/or causing to be publicly disclosed false or misleading statements of a material fact in a report filed with the Philippine Stock Exchange (PSE) and the SEC, in conspiracy with one another, committed on Aug. 23, 2016.”

Jose Aquino, SEC Enforcement and Investor Protection director, said they filed the case against the respondents for possible violation of the Securities Regulation Code (SRC), particularly Section 24 that prohibits any person from making false and misleading statements.

Aquino explained that Calata reportedly declared to PSE that it has partnered with the Sino-American Gaming Investment Group LLC (Sino) and Macau Resources Group Limited (Macau Group) for the creation of a corporate vehicle intended for the future establishment of a real estate and investment trust (REIT) that would be used for the Mactan Leisure City that is expected to start commercial operation in year 2020.

Calata reportedly also disclosed that the Mactan Leisure City would be a P65-billion integrated resort that would be located in a 14-hectare property in Mactan, Cebu.

Last Aug. 23, 2016, Mactan Group and Sino were supposed to reportedly infuse P836.1 million for the Mactan Leisure City project.

 This generated media attention and news about the partnership and the project was made known to the public. 

As a result of the publicity, on Aug. 23, 2016, the closing price of Calata shares went up to P3.55 per share or up 28.16 percent compared to the previous day’s closing of 2.77 per share, while the trading volume rose to 47,755,000 compared to the previous day’s trading volume of 1,869,000 or an increase in trading volume of 2,455 percent.

“An increase in price and volume of shares are considered as the usual effect of positive disclosures which affect investor’s sentiment which, in turn, influence their decision to buy or sell shares. The next day, the trading volume rose to 71,867,000.”

“The evidence shows that investors traded Calata shares in reaction to the disclosure concerning the establishment of the P65 billion-Mactan Leisure City project,” SEC added.

But SEC said the Philippine Amusement and Gaming Corp. (Pagcor) denied Calata’s application for a license because it was already operating a casino at Waterfront Hotel and Casino in Mactan, Cebu.