The Makati City Regional Trial Court found the top executives of delisted Calata Corp. guilty of market manipulation over its botched P65-billion casino project in Cebu, the Securities and Exchange Commission (SEC) said Tuesday.
It said the court, in a decision promulgated on May 28, found Calata Corp. chairman, president and chief executive Joseph Calata guilty beyond reasonable doubt of two counts of violation of Section 24(d) of Republic Act No. 8799, or the Securities Regulation Code (SRC).
Calata Corp. corporate secretary, compliance officer and corporate information officer Jose Marie Fabella was also found guilty of two counts of violation of the same law.
Calata and Fabella were sentenced to pay fines amounting to P4 million each, or to serve time in prison if they fail to pay the fines on account of insolvency.
Michael Foxman, chief executive of Sino-America Gaming Investment Group LLC, Calata Corp.’s partner for the Mactan Leisure City project, was also charged with the same violations.
Calata was implicated for allegedly making misleading and exaggerated statements about its supposed Mactan Leisure City project, inducing the public to buy the company’s shares in 2016.
Section 24(d) of the SRC penalizes anyone who directly or indirectly makes false or misleading statements with respect to any material fact, which he knew or had reasonable ground to believe was so false or misleading, for the purpose of inducing investors to buy a security listed or traded on an exchange.
Calata Corp. in August 2016 reported that it teamed up with Macau Group and Sino-American Investment Group LLC to build a P65-billion casino in Mactan.
As a result, trading volume in Calata shares surged 2,455 percent on the same day the disclosure was made, followed by a 196.41-percent jump on the next trading day.
The company issued the statement even though no application for a license was made to the Philippine Amusement and Gaming Corporation (PAGCOR) for the project, the trial court said.
“Calata Corporation did not disclose, even in general terms, prior correspondence between accused Foxman and PAGCOR, seemingly implying an unlikelihood that the ‘Mactan Leisure City’ project would materialize as projected,” the court said.
“The Aug. 23, 2016, disclosure contained unfounded promises and exaggerations,” the court held, adding that such statements “are not clearly referred to as mere forecasts and are couched and exaggerated to such extent that the public may be misled in thinking that the project would start its operations in 2020, generate a certain amount of revenue, and entail job opportunities.”
