THE Court of Appeals (CA) affirmed the indictment of Calata Corp.’s eight shareholders for their manipulation of the company’s shares on the stock exchange which led to artificially inflated prices.
The Securities and Exchange Commission (SEC) said Thursday that it has received the decision of the Special Sixth Division of the CA dated Sept. 10, regarding its appeal to nullify the Department of Justice (DoJ)’s resolutions dismissing market manipulation charges against the Calata shareholders.
“At bench, there is no dispute that CAL (Calata’s ticker symbol) shares’ valuation and price had increased exponentially during the subject period or that the increase was brought about by the buy and sell transactions done by respondents, who most of the time used the same checkbook for the transactions,” according to the CA decision.
“In contrast, respondents provided no adequate reasons for their actuations except bare denials. These circumstances create a well-founded belief that a violation of the SRC was committed and the respondents may be guilty thereof.”
The shareholders were identified as Michael Ilustre Angeles, Carmelo Dela Cruz Bunag, Arnold Ryan Daquis Dellosa, Richie Ramille Isip, Arnold Daquiz Martin, Dennis Philippe Valencia Vistan, Zandro Jose Sigfrido Laki Zulueta, and Gary Lincoln Calixtro Taboso, in the case filed by the SEC and the DoJ-Task Force on Securities and Business Scam on Nov. 26, 2012.
The SEC found the eight shareholders to have engaged in high-frequency, high-volume buying and selling transactions and stock transfers from one broker to another, artificially raising the price of Calata shares, thereby generating profits in the process.
This is a violation of Section 24 of the Securities Regulation Code (SRC), which outlines the manipulation of security prices, devices, and practices.
The commission noted that the shareholders used manipulative devices such as “painting the tape” and “hype-and-dump” immediately after the agribusiness firm went public on May 23, 2012. This more than tripled Calata share prices to P23.95 by June 4, 2012, from its IPO price of P7.50. The shares, however, would drop only four days after to P12.40 each.
It was later found that the shareholders accounted for 32.95% of the shares bought and 38.47% of the shares sold during the relevant trading period, transferring their shares as they owned accounts from several brokers.
Since its initial public offering in 2012, Calata has been involved in issues about its violation of trading and disclosure rules. This led to its delisting from the Philippine Stock Exchange in 2018. — Arra B. Francia