Public investors’ worries over failed companies

THE Securities and Exchange Commission ( SEC) should tell public investors trading in listed stocks why the commission has not initiated an investigation into how and why a particular listed company goes bankrupt. If that is the result of the SEC’s tolerance of the culture of secrecy among business owners and their executives, then the public has something to worry about.

Imagine being left in the dark about the “whys” and the “hows” behind the losses of a listed company, which for years have been reported under “equity” not as retained earnings but as accumulated deficits!

This was before 2001 when the SEC still exercised jurisdiction over bankrupt companies. It lost such regulatory power to regular courts starting in June 2001 following the passage by Congress of the new Securities Regulation Code.

Who, then, must explain to the public the rehabilitation process when a deficit- laden company seeks to be placed under rehabilitation?

Perhaps, public investors do not even know which among the listed but bankrupt stock corporations are now under rehabilitation. They may know which are losing based on the list provided by the Philippine Stock Exchange ( PSE). However, they may not be aware which among them have been placed under a courtapproved rehabilitation process.

The public will find the PSE’s list among the entries in the stock market’s daily quotation reports, such as Filsyn Corp., for example. Trading remains suspended in the company’s 206.246 million common shares, divided into 123.748 million Class A common shares and 82.498 million Class B common shares.

As of March 31, 2018, Filsyn reported under equity a deficit of P1.788 billion, up from P1.784 billion as of Dec. 31, 2017.

Another one

Asia Amalgamated Holdings Corp. ( market symbol: AAA) is another listed company of more than 20 on the PSE’s list that failed the expectations of the public. Its common shares were last traded on