The corporate regulator filed a complaint-affidavit with the Department of Justice (DOJ) on May 3, charging the respondents with 441 counts of violations of the Securities Regulation Code and Revised Corporation Code.
“The violation committed by the respondents is so grave and serious as it amounts to circulating worthless AR shares to the prejudice of the investing public,” the SEC said.
This follows the April 8 decision by the SEC to slap more than P560 million in fines against company president James G. Beloy, directors, the transfer agent and certain shareholders of Abra for their role in the illegal creation and trading of 169 billion Abra shares from 2015 to 2019.
The Philippine Stock Exchange later said it will start delisting procedures of Abra, whose trading was suspended in 2021 after significant discrepancies were found between registered shares and those circulating in the stock market.
Several stockbrokers told InsiderPH that Abra has thousands of small minority shareholders who are holding on to fraudulent company shares.
A three-year investigation conducted by the SEC found serious violations and collusion allegedly committed by Abra’s corporate leadership, the transfer agent and a few shareholders.
The SEC alleged that the Beloys issued billions of fraudulent shares to entities owned by the Collado family, which traded these stocks on the PSE despite failing to make full payments to the listed company.
The 169 billion shares were worth about P1.7 billion based on their par value of 1 centavo.
Transfer agent’s role
The SEC said the transfer agent Asian Transfer & Registry Corp. approved the registration of these shares with the Philippine Depositary and Trust Corp. (PDTC).
All traded shares are deposited in PDTC under the accounts of stockholders, making the fraudulent shares appear legitimate.
The SEC said Asian Transfer approved the lodgement of the Abra shares “despite knowledge that said shares were already in excess of those registered with the Commission”.
One of the biggest questions surrounding this case is why it took so long of anyone to notice the huge discrepancy between shares registered and listed with the PSE and those lodged with PDTC.
In fact, this only came to light in 2021 after market participants noticed suspiciously large volumes at Abra way above those on the PSE and SEC records.
It’s worth mentioning that PDTC is not under the control of the PSE but is under another private entity known as Philippine Dealing Systems Holdings, which also owns the bond trading platform Philippine Dealing & Exchange Corp.
Last year, the PSE announced the revival of merger talks between PSE and PDS, where the stock exchange owns a roughly 21 percent stake.
Meanwhile, the SEC asked the DOJ to also institute civil and criminal forfeiture, including the accessory penalty of asset preservation against the respondents under Republic Act No. 9160, or the Anti-Money Laundering Act of 2001, as amended.
The SEC complaint named Abra directors and officials James G. Beloy, corporate secretary Amelia G. Beloy; directors Conde Claro C. Venus, Carmelo Rafael D. Tansengco, Joel Albert G. Beloy, and Ma. Belinda T. Gaskell as respondents
It also named respondents Asian Transfer & Registry Corporation; its chairperson and president Arline B. Adeva; corporate secretary Premy Ann G. Beloy and treasurer Joel Albert G. Beloy, who concurrently serve as directors at AR; assistant corporate secretary Joseph M. Acuesta; and director Ma. Agnes B. Hoffman.
It furthermore charged the stockholders Jubileum Air and Sea Logistics, Inc., Andrei Vincent Freight Services Corp., Ferdinand U. Collado, Leila V. Collado, and Susan May I. Gacelo. The Collados are incorporators, beneficial owners and officers of Jubileum and Andrei, while Gacelo serves as a marketing representative of Andrei.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
