Abra Mining Officials Slapped With ₱560-M Fines For Sale Of Unregistered Shares; AMLC To Probe Bank Accounts

The Securities and Exchange Commission (SEC) has imposed fines totaling over P560 million on Abra Mining & Industrial Corporation (AR), its directors, officers, transfer agent, and certain stockholders for unauthorized and fraudulent trading of unissued and unlisted shares amounting to P1.6 billion from 2015 to 2019.

The SEC's decision enables the government, through the Anti-Money Laundering Council, to further investigate the bank accounts of the Abra Mining officials due to the significant impact of the sale of unregistered shares on the investing public. I Photo: Abra Mining & Industrial Corporation

In a decision dated April 8, the SEC Markets and Securities Regulation Department (MSRD) found AR guilty of defrauding the investing public having violated Section 26 of Republic Act No. 8799, or The Securities Regulation Code (SRC), and Section 61 of Republic Act No. 11232, or the Revised Corporation Code (RCC).

Also found liable were AR president James G. Beloy, corporate secretary Amelia G. Beloy, directors Conde Claro C. Venus, Carmelo Rafael D. Tansengco, Premy Ann G. Beloy, and Joel G. Beloy, and former director Belinda T. Gaskell.

The SEC's decision enables the government, through the Anti-Money Laundering Council, to further investigate the bank accounts of the Abra Mining officials due to the significant impact of the sale of unregistered shares on the investing public.

This includes foreigners who bought into the stock from January to February 2021 when Abra Mining accounted for more than 70 percent of daily transactions. The country remains on the gray list of the Financial Action Task Force due to perceived government neglect in filing appropriate charges for financial fraud.

Section 26 of the SRC prohibits any person from employing fraudulent schemes or engaging in practices that deceive others, while Section 61 of the RCC states that stocks should not be issued for a consideration less than their par or issued price.

In another decision, the MSRD found AR's transfer agent, Asian Transfer & Registry Corporation, and its officers guilty of violating Sections 26 and 52.1 of the SRC, and Section 36.4.3.2 of the 2015 Implementing Rules and Regulations of the SRC.

Several stockholders of Abra Mining were also held liable for violations of Section 26 of the SRC due to discrepancies in AR shares lodged with the Philippine Depositary and Trust Corp. (PDTC), which exceeded the number of listed, registered, issued, and subscribed shares submitted in the company's filings with the SEC.

Illegal issuances of AR shares totaling 169.05 billion shares were made from 2015 to 2019, exceeding the company's authorized shares.

The AR officers responsible for the accuracy of financial statements were deemed negligent in their duties.

The MSRD found Asian Transfer & Registry and its officers liable for the lodgment of illegal shares into the PDTC, facilitating their trading on the stock market despite being aware of the defects in the issuance process.

This resulted in unsuspecting investors purchasing defective shares, to the prejudice of the investing public.