PSE seeks delisting of Calata Corp.
The Philippine Stock Exchange (PSE) has initiated involuntary delisting proceedings against Calata Corporation (CAL) after initially slapping the firm with a suspension in the trading of its shares due to multiple violations of disclosure rules.
In a notice to the public, the PSE said it found that Calata made 29 violations of Section 13.1 of the PSE Disclosure Rules from November 29, 2016 to June 20, 2017.
It also had 26 violations of Section 13.2 of the PSE Disclosure Rules from October 6, 2016 to March 16, 2017 and April 26, 2017 to May 2, 2017.
Under the Scale of Penalties in the PSE Disclosure Rules, the fourth and succeeding violations of the PSE Disclosure Rules constitute grounds for delisting.
Further, under paragraphs (a) and (i) of the PSE Delisting Rules, failure to comply with the PSE Disclosure Rules, repeated failure to make timely, adequate and accurate disclosures of information or failure to submit any reportorial requirement to the Exchange in accordance with the PSE Disclosure Rules are among the grounds for initiation of involuntary delisting proceeding, and, when applicable, imposition of the relisting prohibition.
A company that has once been delisted cannot apply for relisting within a period of five years from the time it was delisted.
Directors and executive officers of a company that has been delisted are disqualified from becoming directors or executive officers of any company applying for listing within the same period counted from the time the application for delisting was approved.
Following the service of a Notice of Initiation of Involuntary Delisting Proceedings and Notice of Hearing and in strict observance of due process requirements, Calata will be given the opportunity to explain its side by submitting a Memorandum or Position Paper and by participating in a hearing specifically scheduled for this purpose.
The Exchange shall consider the explanation of the company during the hearing and in the Memorandum or Position Paper before promulgating a decision on the matter.
The initiation of delisting proceedings is without prejudice to any other regulatory action that may be undertaken by the Exchange in connection with any other matter that may hereafter be made known to the Exchange.
The PSE cited CAL to have violated the rules of the PSE governing the timely disclosure of the disposition of shares by a company’s directors and principal officers and disclosure of updates of previous disclosures on material information that may affect investor decision.
The PSE also found CAL 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.
It may be recalled that Calata Corporation was the subject of an investigation by the Securities and Exchange Commission just after its listing in 2012 and charges were filed against some individuals for alleged market manipulation.