Where are the market regulators?

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EMETERIO SD. PEREZ

ORIENTAL Peninsula Resources Group Inc. (ORE) posted on the website of the Philippine Stock Exchange (PSE) a notice to public investors that said it “will not be able to file the above-mentioned report on its deadline of May 15, 2017 because it is still finalizing some material information on business conditions relevant to complete the quarterly report. Without the said information, the Corporation will not be able to make a complete report.”

The use of “above-mentioned reports” refers to first-quarter financial filings.

Something is missing from that filing of Oriental Peninsula, which uses ORE for its market symbol. As in the past so many decades, listed companies would announce through the PSE website their failure to comply with certain reportorial requirements.

Is that all there is to ORE’s filing?
Notice how the public investors have been taken for granted, not by Oriental Peninsula. This time around, the public investors should not let the Securities and Exchange Commission (SEC), and, possibly, also the PSE, to get away with their sins of omission. Why do their monitoring teams prefer to remain silent on postings of listed companies informing them and the public of their inability to comply with certain deadlines?


It is time the public investors were also told about the decision of the SEC and the PSE. Did they approve ORE’s request?

Annual meeting
Incidentally, Oriental Peninsula also informed the SEC and the PSE about the postponement of the company’s annual stock meeting supposedly scheduled for “the last Friday of May of every year.”

“The postponement,” Oriental Peninsula said in a separate posting, “aims to give the Company sufficient time to prepare for the additional matters, which may have to be presented to the stockholders.”

Again, as with the delayed filing of quarterly financials, the public will never know how both the SEC and PSE acted on the postponement of the annual stockholders’ meeting of Oriental Peninsula. The PSE website does not carry anything that could have informed the public investors of whatever actions were taken by it and the SEC.

By the way, Oriental Peninsula acted as if it did not care at all about the public investors. Like other listed companies, it only “advised that during today’s meeting, the board of directors … approved the postponement of the annual stockholders’ meeting…”

More public than others?
A public ownership report (POR) as of March 31 showed the public investors as holders of Oriental Peninsula shares numbering 1.275 billion ORE common shares, or 44.278 percent. This ownership profile appears to make the company more public than others. Or does it?

Let’s take a look at the holdings of the company’s three principal stockholders, who own a combined 1.602 billion ORE common shares, or 55.64 percent.

Combining all their shares to see if they make up the total, we would know that their ownership amounts to more than 99.91 percent, showing a remainder of more than 0.08 percent. And if these shares are not owned by the public, then they must be owned by company insiders.

Oriental Peninsula tries to make its ownership as public as possible to become at par with other listed companies. A look at the composition of its nine-person board, however, shows that it only appears to be more public than others.

Like other listed companies, the three principal stockholders of Oriental Peninsula, namely Redmont Consolidated Mines, Citimax Group and Golden Spin Realty nominate seven regular directors and appoint two independent directors.

Due Diligencer’s take
When the SEC sets a deadline for submission of reports, it knows the time frame would be enough for companies to fully comply. Otherwise, what’s a deadline for if some religiously stick to it while a few others, if not many others, do not?

Not observing the deadline could also be described as an act of defiance of regulatory authorities, but saying that in this case would probably be too harsh for this piece.

Citing what they think are justifiable reasons for non-compliance with the market rules, some companies, with or without listed shares, opt to delay the filing of reports. Don’t they know that they are exposing themselves to suspicion that they are cooking up something that the public investors would never be told about?

By now, their public investors should feel that that they are being taken for granted by the companies in which they may be heavily invested. Is this fair?

esdperez@gmail.com

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