On Aug. 12, the Department of Justice (DOJ) said there is cause to file criminal charges against the firm, its executives, transfer agent, and several stockholders for flooding the market with over 186 billion unauthorized shares.
Regulators said the company released unregistered stock, allowing “worthless securities” to circulate and misleading investors.
The Philippine Stock Exchange suspended Abra Mining in March 2021 after discovering it had issued and traded far more shares than authorized, violating listing rules and undermining market integrity.
SEC chair says charges to boost PH capital market
“The indictment of AR, its officers, stock transfer agent, and stockholders marks a vital step in upholding trust and confidence in our capital market,” SEC chair Francis Lim said of the case, which was filed under his predecessor, Emilio Aquino.
“The SEC remains steadfast in its commitment to hold accountable any entity found to have violated that trust, and ensure that they are brought before the proper venues to answer for their actions,” Lim added.
Before the complaint, the SEC fined Abra Mining, its executives, transfer agent, and key stockholders over P560 million and permanently barred them from serving as officers or directors of any listed company.
The Philippine Stock Exchange suspended Abra Mining in March 2021 after discovering it had issued and traded far more shares than authorized, violating listing rules.
What’s the case about?
The charges stem from a May 2024 SEC complaint alleging Abra Mining sold fraudulent stock from 2015 to 2019.
Regulators discovered 258.96 billion shares lodged with the Philippine Depository and Trust Corp. (PDTC) as of February 2021.
This far exceeded the 72.95 billion shares approved for trading, the 95 million shares officially registered, and the company’s own reports of 99.29 billion issued and 199.29 billion outstanding shares.
Officials said this means billions of unauthorized shares entered the market, diluting legitimate holdings and tricking investors into buying stock that should never have been sold.
Who’s involved?
Prosecutors cited “prima facie evidence” to charge the company for violating SRC Sections 8 and 26.1 and RCC Sections 61–63, naming Asian Transfer & Registry Corp. and stockholders Joseph M. Acuesta, Andrei Vincent Freight Services, Jubileum Air and Sea Logistics, Ferdinand and Leila Collado, and Susan May I. Gacelo.
Abra Mining is run by the Beloy family, with James G. Beloy, Amelia G. Beloy, Premy Ann G. Beloy., and Joel Albert G. Beloy also charged. Investigators said share discrepancies were visible in PSE data and ownership reports from 2014 to 2019.
Scheme to mislead investors
The DOJ said Abra Mining ran a deliberate scheme to mislead investors, issuing shares to Collado, Gacelo, Jubileum Air and Sea Logistics, and Andrei Vincent Freight Services at below par value and without full payment.
The company still issued stock certificates, which were validated by Asian Transfer and lodged with PDTC, then sold to the public as legitimate shares.
“Without their accommodation, the grand scheme of circulating worthless securities to the public would not have materialized,” the resolution said.
Prosecutors also faulted Asian Transfer for repeatedly clearing unregistered shares despite signs Abra Mining had already exceeded its authorized shares, saying its “omission and acquiescence facilitated the fraudulent transactions.”
—Edited by Miguel R. Camus
