Businessman Joseph Calata, once touted as the youngest billionaire in the Philippines, and an associate were convicted of violating the Securities Regulation Code for releasing misleading information about a failed P65-billion Cebu casino resort venture in 2016.
Calata, the chair and CEO of agribusiness company Calata Corp., and Jose Fabella, the company’s corporate secretary, corporate information and compliance officer, were ordered to pay fines of P4 million each for two counts of violations of Section 24(d) of the SRC, a Makati Regional Trial Court decision on May 31, 2024 showed.
Successful conviction
The conviction is a win for the Securities and Exchange Commission, which filed the criminal charges before the Department of Justice in 2017.
The case against Michael Foxman was archived since he remains at large, according to the decision that was seen by InsiderPH.
Foxman was the CEO of prospective casino partners Sino-America Gaming Investment Group and a director and shareholder at Macau Resources Group.
Stock price swings
The investigation focused on Calata’s August 2016 disclosures on its plans for the "Mactan Leisure City" casino venture, influencing a significant spike in share price and trading volume worth hundreds of millions of pesos over several days.
According to the court, the disclosures contained unfounded promises and exaggerations, including timeline targets and projected revenues.
Set to rise in a 14-hectare property in Mactan Island, Cebu, the proposed project would host leisure facilities, a casino complex, conference facilities, yacht club and a potential 7-star hotel.
No Pagcor go-signal
The disclosures were made four months after the state-run Philippine Amusement and Gaming Corp. (Pagcor) indicated it was not yet issuing licenses outside the newly established Entertainment City along Manila Bay.
“Calata Corporation did not disclose, even in general terms, prior correspondence with Pagcor, and the fact that as of August 26, 2016, no application for said license was filed with the agency,” the court said.
Omission of material information
“Again, these are material facts or information which should have been disclosed as these would affect investors' decision in transacting with Calata shares. The omission of such information, in the light of statements in the August 26, 2016 disclosure that the ‘projected date of completion would be in the middle of 2020’ made the disclosure misleading,” it added.
Calata, a leading supplier of fertilizers and animal feeds, raised P270-million via an initial public offering in 2012. It was officially delisted from the Philippine Stock Exchange in 2017 for repeated violations of the disclosure rules of the bourse.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
