PSE warns investors on trading Benguet shares
abs-cbnNEWS.com | 11/04/2009 2:40 AM
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MANILA - The Philippine Stock Exchange cautioned investors on trading the shares of Benguet Corporation, a mining firm that dodged a trading suspension on October 27.
"The Exchange feels duty bound to advise the general public to exercise caution and due diligence before buying or selling any [Benguet Corp] shares," PSE president and chief executive officer Francis Lim wrote in a "Notice to the Public" prominently displayed on the bourse's website.
The Securities and Exchange Commission (SEC) spared the mining firm from a trading suspension after the PSE found it to have violated disclosure requirements.
Lim cited some of the events that eventually led to intervention of the SEC:
- On October 19 - The PSE imposed monetary penalty and one-month trading suspension on Benguet shares. The trading suspension was effective one week later, or on October 27.
- On October 22 - Benguet Corp wrote the SEC for reconsideration
- On the 11th hour--in the afternoon of October 26--the SEC ordered PSE not to impose the penalties pending its consideration of Benguet's letter. "No other grounds were givern to the PSE for this order," Lim noted.
"The imposition of penalties was done only after careful and deliberate evaluation of the views of [Benguet] on the matters at hand over an extended period of time. The Exchange also took into account the Corporation's record of non-disclosure in the past," Lim wrote.
Benguet received notices of default from its creditors for failing to settle its P1.2 billion debts, which were restructured way back in 1993.
The notices of default put the mining firm's prime revenue generating assets at risk since creditors can start legal proceedings to forfeit them.
PSE's disclosure rules compel listed companies to promptly report information that can affect their financial performance.
Benguet had contested the trading suspension citing some technicality regarding the identity of creditors serving the default notices.
While the SEC has granted the PSE a self-regulatory organization status (meaning it can impose its own rules over erring brokers and listed firms), SEC spokesman Gerard Lukban said the regulator intervened since decisions of the exchange are still 'appealable'.
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