THE Securities and Exchange Commission (SEC) said a Makati City trial court upheld the conviction of officers of delisted Calata Corp. for making statements the court found misleading, which allegedly caused a surge in the company’s share trading in 2016.
In a consolidated order dated May 19, Branch 148 of the Regional Trial Court of Makati City denied the motion for reconsideration filed by Calata Corp. officers seeking acquittal on two counts of violating Section 24(d) of Republic Act No. 8799, or the Securities Regulation Code (SRC), the SEC said in an e-mail statement over the weekend.
In May 2024, the court sentenced Calata Corp. Chairman, President, and Chief Executive Officer Joseph H. Calata, as well as Corporate Secretary, Compliance Officer, and Corporate Information Officer Jose Marie Fabella, to pay a P4-million fine each or serve prison time for market manipulation.
Section 24 prohibits false or misleading statements on any material fact that a person knew or had reasonable ground to believe was false or misleading to encourage investors to buy a security listed or traded on an exchange.
The court rejected the claim that the officers violated only Section 17 of the SRC, which relates to reportorial requirements and is administrative in nature without penal sanctions.
“The fact that [Calata and Fabella] may have also committed an administrative violation of Section 17 of the SRC is not a bar to prosecution under Section 24,” the order said.
The order also denied the claim that there was insufficient evidence to prove the officers’ guilt beyond reasonable doubt, despite the lack of actual injuries and witnesses testifying to losses from the alleged misleading disclosures.
“Actual loss or harm, much less actual public harm, is not an element of the offense. Thus, the Court reiterates that the evidence presented by the prosecution proves beyond a reasonable doubt the criminal liability of the accused,” the order said.
The trading volume of Calata Corp. shares surged following the company’s disclosure in August 2016 of its partnership with Sino-America Gaming and Macau Resources Group Ltd. for the development of the $1.4-billion Mactan Leisure City integrated resort and casino project.
The court previously found the disclosures contained “unfounded promises and exaggerations” and were made despite the absence of a license application with the Philippine Amusement and Gaming Corp. for the project.
Eight shareholders of Calata Corp. were also previously indicted for market manipulation for allegedly employing manipulative devices that induced the public to buy its shares. — Revin Mikhael D. Ochave
