The Securities and Exchange Commission (SEC) has imposed fines totaling at least Php 560 million on Abra Mining & Industrial Corp., along with its directors, officers, transfer agents, and certain stockholders, for engaging in unauthorized trading of unissued and unlisted shares between 2015 and 2019.
Citing violations of Section 26 of the Securities Regulation Code (SRC) and Section 61 of the Revised Corporation Code (RCC), the decision was made by the SEC’s Markets and Securities Regulation Department (MSRD) on April 8, according to The Philippine Star.
Abra Mining’s President James Beloy, Corporate Secretary Amelia Beloy, Directors Conde Claro Venus, Carmelo Rafael Tansengco, Premy Ann Beloy, Joel Beloy, and former director Belinda Gaskell were found liable for their involvement in the illicit activities.
As per the regulatory department, the officers and directors of the firm should have been aware of the illegal trading activities and could have prevented them from occurring if they had fulfilled their duties as required by law.
The SEC cited Section 26 of the SRC, which prohibits any person from engaging in fraudulent schemes or deceitful business practices. Meanwhile, Section 61 of the RCC stipulates that stocks cannot be issued for a consideration less than their par or issued price.
The MSRD found that Abra Mining and its officers violated Section 61 of the RCC by issuing shares below their par or issued price without reflecting any cash inflow from the issuance in the company’s financial statements.
The mining company’s transfer agent, Asian Transfer & Registry Corp., and its officers were also found guilty of violating certain sections of the SRC and its implementing rules and regulations for facilitating the trading of illegal shares in the stock market.
Furthermore, several stockholders of Abra Mining were held liable for violations of Section 26 of the SRC for circulating illegally issued shares on the market without paying the full price for the shares.
Consequently, all officers and directors of Abra Mining, its transfer agent, and the involved stockholders are disqualified from being registered persons and from serving in certain roles within registered financial intermediaries for five years.
The case stemmed from discrepancies in Abra Mining shares lodged with the Philippine Depositary and Trust Corp. (PDTC), which exceeded the number of listed, registered, issued, and subscribed shares reported in the company’s filings with the SEC.
Illegal issuances of Abra Mining shares totaling 169.05 billion shares across 474 stock certificates were discovered to have occurred between 2015 and 2019.
