SEC slaps P560 million in fines on Abra Mining officials, shareholders, transfer agents over illegal shares

Facade of the Securities and Exchange Commission (SEC)  in this photo taken on June 22, 2023. Jonathan Cellona, ABS-CBN News

MANILA -- The Securities and Exchange Commission (SEC) has slapped P560 million in fines on Abra Mining and Industrial Corporation, its officers, transfer agents and stockholders for the illegal trading of unissued and unlisted shares from 2015 to 2019. 

In a statement, the SEC said 169 billion illegally issued Abra Mining shares covering 474 stock certificates were made in the said time frame.

The case stemmed from discrepancies in Abra Mining shares lodged with Philippine Depositary and Trust Corp. (PDTC), which were in excess of the number of listed, registered, issued and subscribed shares submitted in the company’s filings with the SEC.

There were 258.96 billion Abra Mining shares lodged with the PDTC, but only 72.95 billion were listed in the Philippine Stock Exchange.

Abra Mining's latest approved registration statement also showed it has 95 billion in total shares, but its corporate documents showed that it had 99.29 billion in issued shares and 199.29 billion in subscribed shares. 

The SEC found Abra Mining guilty of violating Section 26 of the Securities Regulation Code, and Section 61 of the Revised Corporation Code (RCC).

The SEC said the company's officers had or should have had knowledge of the illegal circumstances regarding the issuances of the illegal shares during their term.

The SEC's Markets and Securities Regulation Department  also dismissed the denials and lack of knowledge claimed by the officers and directors, noting that these “can only be attributable to their gross negligence in the performance of their duties.”

The stockholders, meanwhile, were found liable as they "never paid the full price of the shares that they supposedly acquired via private placement." 

In a separate decision, the SEC also found Asian Transfer & Registry Corporation--Abra Mining's transfer agent--guilty of breaking the Securities Regulation Code.

"During the investigation, it was found that despite knowledge of the defects in the issuance of the illegal shares and their duty to prevent their lodgment, the transfer agent fraudulently warranted that such shares were not defective and eligible for lodgment," the SEC said.

The transfer agent also failed to comply with the SEC’s orders to furnish the regulator with a copy of its books and records. 

All officers, directors, and stockholders of Abra Mining and its transfer agent, are disqualified from being a registered person and are prohibited from serving or acting as an employee, officer, or director of a registered financial intermediary under the supervision of the SEC within five years.

They are also disqualified from being an officer, director, or person performing similar functions of an issuer of registered securities.

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