THE Court of Appeals has stopped indefinitely the imposition of a P174-million fine on business tycoon Roberto Ongpin over alleged insider trading involving Philex Mining shares in 2009.
The court’s Special 13th Division issued a writ of preliminary injunction against the Securities and Exchange Commission (SEC) at the request of Ongpin, who had been labeled an “oligarch” by President Rodrigo Duterte.
Given the “essentially irremediable” effects of the SEC sanctions on Ongpin, it was “more prudent and proper for us to grant a preliminary injunction,” the court said in an 11-page resolution, a copy of which was obtained by The Manila Times.
The appeals court ordered Ongpin to post a P20-million bond pending the resolution of the case.
Last July 8, the SEC found Ongpin liable for 174 counts of insider trading involving Philex Mining shares on December 2, 2009, and fined him P174 million or P1 million per count.
The SEC said Ongpin bought Philex shares when he was a minority shareholder of the mining firm, and while in possession of nonpublic material information that Hong Kong-based First Pacific Co. would purchase a huge chunk of Philex shares.
The fine imposed by the SEC en banc was said to have been 10 times higher than the P17.4-million penalty suggested by the SEC’s Enforcement and Investor Protection Department.
The court earlier issued a 60-day temporary restraining order in favor of Ongpin. With the injunction, the stay order has no duration.
The latest ruling was penned by Associate Justice Ma. Luisa Quijano-Padilla, with the concurrence of Justices Samuel Gaerlan and Marie Christine Azcarracaga-Jacob.
It stated that “pursuant to the Order given in open court on September 1, 2016, this Court shall await the filing of respondent’s Comment to the main petition and petitioner’s Reply. Thereafter, the case shall be deemed submitted for decision.”
It took cognizance of another penalty imposed by the corporate regulator, disqualifying Ongpin from being an officer or member of the board of directors of any publicly listed firm.
On Tuesday, the SEC said it might take more time for it to approve the request of PhilWeb Corp. to the complete Ongpin’s 53.76-percent stake in the gaming technology company to Gregorio Araneta Inc. (GAI) before a tender offer to minority shareholders.
Ongpin is selling his 771.651 million PhilWeb shares to GAI, worth P2.60 per share or P2 billion in total, as a
way to completely divest in PhilWeb and convince the state-owned Philippine Amusement and Gaming Corp. (Pagcor) to renew its license to provide technology services to Pagcor eGames cafes.
Duterte had ordered online gaming operations stopped, as he tagged Ongpin as an oligarch that needed to be destroyed for exploiting government connections to bag business deals.
Pagcor has repeatedly turned down various offers by Ongpin, including donating the PhilWeb stake to the state firm.
SEC chief Teresita Herbosa told reporters late Tuesday the commission needed time to study PhilWeb’s request as this was the first time a company would conclude a share transaction before a tender offer to minority shareholders.
“I’m trying to think if there’s a particular situation like this. If there’s precedent to this, it’s okay. But it is the first time, so it might take some time for us to study it,” Herbosa said.
A tender offer is required before the acquiring party gives minority shareholders the option to divest from a listed company, when there is a change in equity structure or shareholder control.
PhilWeb President Dennis Valdes wants Ongpin and GAI to “proceed ahead of the tender offer,” hoping that there would be no “further delay” in securing another license with Pagcor.
“The concern is that any further delay in Mr. Ongpin’s exit from the company may delay its discussions with Pagcor regarding the reissuance of the company license. This would further damage the network of e-Games operators and the 5,000 employees of that network, which has been shut down for two months now,” PhilWeb said in a letter to the Philippine Stock Exchange (PSE) dated October 10.
The transaction is to be done in two installments, the first of which will cover 653.151 million shares through a special block sale and is subject for approval by the PSE.
The second installment will cover the rest of the 118.5 million shares that must be listed on the PSE.
On Tuesday, PhilWeb announced that Valdes and its new chairman, Gregorio Ma. Araneta III, formally submitted the firm’s application with Pagcor for the renewal of its Omnibus Intellectual Property License and Management Agreement or contract for the operation of Pagcor’s 286 e-Games outlets.