By Revin Mikhael D. Ochave, Reporter
THE Securities and Exchange Commission (SEC) said the bank accounts and other assets of Maria Francesca Tan (MFT) Group of Companies, Inc. have been frozen due to alleged illegal investment activities, while Calata Corp. officials have been ordered to pay P8 million in fines for making “misleading and exaggerated” statements about a project.
In a resolution promulgated on May 13, the Court of Appeals (CA) granted the petition of the Anti-Money Laundering Council (AMLC) to freeze MFT Group’s bank, securities, and insurance accounts for a 20-day period, the SEC said in a statement on Tuesday.
The freeze order covers 138 bank accounts, four securities accounts, and four insurance accounts.
“Under Section 10 of Republic Act No. 9160 or the Anti-Money Laundering Act of 2001, as amended, the CA may issue a freeze order upon a verified ex parte petition by the AMLC and after determination that probable cause exists that any monetary instrument or property is in any way related to an unlawful activity,” the SEC said.
In a separate resolution promulgated on May 17, the CA also granted the AMLC’s ex parte application for a bank inquiry order, allowing it to inquire or examine the bank, securities, and insurance accounts of the group within a 120-day period.
“The freeze and bank inquiry orders were issued after the MFT Group was found to be soliciting investments from the public without the necessary licenses from the SEC,” the corporate regulator said.
“The MFT Group promised guaranteed returns ranging from 12% to 18% of the amount they invested, which was considered as interest income…,” it added.
MFT GROUP DISAGREES
In a statement to BusinessWorld, MFT Group Legal Counsel Estrella C. Elamparo said: “While we respect and will abide by the resolution issued by the Court of Appeals on the application for freeze order applied for by the Anti-Money Laundering Council, upon the instigation by the Securities and Exchange Commission, we respectfully disagree that it has any basis.”
“The petition suffered from a crucial evidentiary gap that should have prevented the court from issuing a freeze order because AMLC failed to establish how each of the accounts is materially linked to the alleged unlawful activity of selling unregistered securities,” she added.
She said the loan transactions—subject of the SEC investigation—are not securities transactions “but personal loans so no predicate crime exists.”
“Moreover, all that the AMLC did was list down the bank accounts of the respondents in the case, list down the covered transaction reports (CTRs), and then jump to the conclusion that the number of transactions could have most likely been sourced from the alleged illegal transactions.”
“Not an iota of proof was presented to establish any link between the supposedly solicited investments and any of bank accounts,” Ms. Elamparo said.
She further said the MFT Group is a holding company, managing its investments in a portfolio of different companies and a variety of business activities. “It maintains legitimate business operations, which entail the payment of obligations to third persons, such as their suppliers, service providers, and even their employees who are likewise unjustly affected by the unwarranted freezing of bank accounts.”
“If we follow the AMLC’s logic, then all transactions occurring in all bank accounts involving someone accused of a predicate crime are presumptively proceeds of an unlawful activity. This shotgun approach could never have been the intention of the law, otherwise, the legislators would have done away with the phrase ‘in any way related’ to an unlawful activity. That phrase was included in the law precisely because a nexus needs to be established, at least preliminarily, between the transaction and unlawful activity,” she added.
“The resolution of the Court of Appeals is not yet final and we are hopeful that it can still be reversed on appeal,” Ms. Elamparo also said.
CALATA OFFICIALS FINED
In a separate statement, the SEC said that officers of former listed company Calata Corp. were ordered to pay P8 million in fines for allegedly making “misleading and exaggerated” statements about its Mactan Leisure City project, inducing the public to buy the company’s shares in 2016.
The SEC said that Makati City Regional Trial Court Branch 148 promulgated a decision on May 28 saying that Joseph H. Calata and Jose Marie E. Fabella were deemed “guilty beyond reasonable doubt” of two counts of violation of Republic Act No. 8799 or the Securities Regulation Code.
Mr. Calata is the company’s chairman, president, and chief executive officer, while Mr. Fabella is the corporate secretary, compliance officer, and corporate information officer.
“Calata and Fabella were sentenced to pay fines amounting to P4 million each, or to serve time in prison should they fail to pay the fines on account of insolvency,” the SEC said.
“Fabella, with the consent and authority of Calata, was found to have made misleading statements in the company’s disclosures to the Philippine Stock Exchange (PSE) about its partnership with Sino-America Gaming and Macau Resources Group Ltd. for the development of a $1.4 billion integrated resort and casino project called Mactan Leisure City,” it added.
The PSE ordered the delisting of Calata Corp. back in 2017 due to its repeated violations of PSE Disclosure Rules and Delisting Rules.
BusinessWorld tried to reach out to Mr. Calata for comment.
