MANILA, Philippines – A nonprofit association of the Philippine stockholders, Shareholder’s Association of the Philippines (SharePHIL), requested the Securities and Exchange Commission or SEC to conduct an investigation against Calata Corporation regarding the transactions made to the stock market by its directors, executives, and other staff and officers.
According to a February 8 letter to the Security and Exchange Commission, SharePHIL claimed that Calata concealed material details when it experienced a 125 million peso casualty loss which resulted from a typhoon that occurred during 2016’s fourth quarter. Calata is a retailer and distributor company of agricultural goods.
SharePHIL wrote in the letter that the casualty loss of Calata Corporation was stated in the company’s April 26, 2017, financial statements as part of the company’s annual report for 2016. It was, however, not disclosed immediately to the public opposing the disclosure order by the PSE and as obligated by the Security Rules and Regulation. Instead, it’s only been made known to the public on May 2, 2017.
Requested for some clarifications, Joseph Calata, founder and chief executive officer of Calata Corporation, told a newspaper company that the sales generated by its assets which were destroyed by the typhoon last year are only equivalent to 1 percent of the gross revenue of the company.
Calata added that the loss from the damage caused by the typhoon during 2016 didn’t have any effect on 2016’s total revenue of the company. In fact, the net profit for 2016 even grew compared to the net profit for 2015 despite all the allegations directed to the company.
SharePHIL clarified that after the concealed casualty loss, Joseph Calata sold and disposed of a sum of 108.602 million shares amounting to 277.5 million pesos. The trading of the shares occurred in a sequence of transactions from the 4th quarter of 2016 up to the 1st quarter last year.
Francis Lim, president of SharePHIL, mentioned that the action made, the request for an investigation, is part of the effort, which will show the group’s attempt and eagerness to assist the government in establishing confidence and integrity with regard to the stock market.
Francis Lim, who is also a recognized corporate lawyer, noted that the disclosure order of the PSE and SRC mandates a publicly listed company to disclose material information within 10 minutes since the time the company finds out about it. This rule’s objective is to secure fair play in the stock market to hinder company insiders from taking advantage of the public investing in the company’s shares.
SharePHIL emphasized that the stock price of Calata continuously dropped from October 3, 2017’s 3.49 pesos per share to 1.86 pesos in May 2017 when its financial statement was released as part of the annual report of the company for 2016.
The casualty loss was an essential development for Calata since its profit comes mainly from the trading of agricultural products, according to Lim.
He expressed for the Security and Exchange Commission to take suitable actions after the investigation against those they will find accountable.