PSE MOVE ON ABRA MINING A COP-OUT?

The pronounced plan of The Philippine Stock Exchange (PSE) to seek a white knight has received mixed reviews from investors in the stock market.

Some investors, who saw their investments Shanghaied with the suspension of Abra Mining issues due to the sale of unlisted shares said that the PSE’s planned action is a “cop-out.”

They said that the unscrupulous officials of Abra Mining who violated securities regulations will be able to enjoy their “stock market winnings” at the expense of investors.

“The PSE should throw the books” at them, the investors said, especially since the sale of unlisted shares is deemed a criminal act.

However, some investors who were caught with their pants down say that the move for a white knight is a step in the right direction but at the same time believe that the PSE should blacklist officials from ever sitting as directors in listed shares.

The Abra Mining issue has bolstered the need for punitive action and for officials to be clapped behind bars as what they did corresponds to securities fraud, investors said.

In fact, there is a call for the Securities and Exchange Commission (SEC) to undertake an investigation on the officials of Abra Mining motu propio.

This is what some investors who bought shares of AR want since such an SEC action will send a clear signal to the investing community that, in the stock market game, no one can flout the law.

This will also test the experience of SEC Chairman Emil Aquino, who at one time headed the prosecution group of the commission during the time of then SEC Chairman Rosario N. Lopez, that has been dubbed as the Golden Age of the SEC, when it was winning cases before the courts.

Based on PSE's findings that led to the suspension of the trading of shares of Abra Mining:

1. The number of the Company's fully paid issued and outstanding shares exceeds the number of listed shares, in contravention of PSE's rule that all fully paid issued and outstanding shares should be applied for listing;

2. The number of the Company's shares lodged with PDTC exceeds the number of the Company's listed shares, in contravention of PSE's rule that only securities approved for listing should be lodged with PDTC for trading, and;

3. The number of the Company's shares lodged with PDTC exceeds the number of the Company's issued and outstanding shares (as contained in the Company's audited financial statements) which means that shares which are not yet reflected in the books of the Company have been lodged with PDTC and are being traded, in contravention of the provisions of the Revised Corporation Code.

As per the Company's website, the officials of Abra Mining are as follows:

The Board of Directors include Jeremias B. Beloy - Chairman; James G. Beloy - Director; Yu Ting Guan - Independent Director; Ma. Belinda T. Gaskell - Independent Director; Premy Ann G. Beloy - Director

Trading of Abra Mining shares, including the unlisted shares, rose in January as investors bought into the stock. Abra Mining had accounted for 77% of the market's daily trading before the stock's March 4 suspension.

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