Criminal raps vs Calata price manipulators set

By Miguel R. Camus, BusinessMirror

Posted at Nov 09 2012 08:06 AM | Updated as of Nov 09 2012 07:38 PM

MANILA, Philippines - The Securities and Exchange Commission (SEC) will proceed with the filing of criminal charges against the “first batch” of people involved in the price manipulation of shares of agribusiness firm Calata Corp. in the weeks after its initial public offering in May.

SEC Chairman Teresita Herbosa said in a chance interview after the commission’s weekly en banc (full court) meeting late Thursday that they approved a recommendation by the SEC’s enforcement and prosecution unit to proceed with the filing of cases with the Department of Justice.

Herbosa declined to give details beyond that.

“We cannot release any names until the complaint itself has been filed. This is the first batch, meaning there are more to follow,” Herbosa said. “We have already identified the people who may have engaged in those trades.”

The filing is the culmination of a four-month investigation conducted by the SEC’s enforcement and prosecution unit. The investigation report itself was completed on October 30 but only acted upon by the SEC’s leadership on Thursday due to the Thursday and Friday holiday last week.

The unusual trading of Calata drew the attention of Capital Markets Integrity Corp. (CMIC), the independently-run market watchdog of the Philippine Stock Exchange (PSE). CMIC had assisted the SEC in its investigation.

Calata shares more than tripled within two weeks of listing on May 23, before abruptly falling in a matter of days.

Calata shares jumped 6.22 percent to P6.15 per share on Thursday before the SEC finished its en banc session. The company has been trading below its IPO price of P7.50 each since the SEC formally confirmed its probe on August 2.

Jose Fabella, Calata corporate secretary, welcomed the statements made by the SEC.

“We are happy that at least the investigation has been concluded and the people responsible will be made responsible for their actions,” he said in a phone interview, while clarifying he has not seen the SEC’s report.

“We would like to assure the investing public that the value of the company remains intact,” he said.

This is not the first time the SEC has filed cases against individuals for illegal stock market trading activities. It also filed cases against the much more controversial BW Resources in the late 1990s although none have resulted in the conviction of any individual.

Calata, the third company to go public this year, is the country’s biggest distributor of farming inputs like feeds and fertilizers and is currently expanding its agricultural footprint through the farming of vegetables and livestock.

It is headed by its 31-year-old Chairman and Chief Executive Officer Joseph Calata who admitted earlier that he asked the PSE to investigate the trading of his company’s shares.