The Securities and Exchange Commission en banc denied the appeal of diversified conglomerate San Miguel Corp. and instead penalized the company P769.29 million, possibly the biggest fine imposed by the corporate regulator so far, for late filing of a reportorial requirement when it acquired a stake in Manila Electric Co.
San Miguel said in a disclosure to the stock exchange Monday it would contest the SEC decision.
The SEC in a decision dated Nov 21 denied the appeal of San Miguel for lack of merit. It also ordered San Miguel to settle the P769-million penalty within the next 15 days.
The SEC upheld the order of its corporate finance department, penalizing San Miguel for the late filing of an initial statement of beneficial ownership of securities when it acquired a 10-percent stake in Meralco in 2011. San Miguel also reportedly made a late filing on the subsequent change in the beneficial ownership when it sold a portion of its Meralco stake to unit San Miguel Pure Foods Co. Inc.
San Miguel allegedly submitted both reports 165 days late—a violation of the Securities Regulation Code.
San Miguel had appealed the order, saying the late filing was due to “inadvertence.”
San Miguel also argued that while it was late in filing the reports, the company made various disclosures regarding the transactions.
The SEC, however, cited the code clearly required directors, officers and principal stockholders of listed companies to file an initial statement of beneficial ownership of securities within 10 days and report changes in beneficial ownership within 10 days after the close of each calendar month.
“SRC Rule 23 merely demonstrates the state’s policy of insuring full and fair disclosures of securities in order to protect the investors. Such rule on disclosure is designed to assist in an informed investment decision, those contemplating the purchase, holding or disposition of securities, thereby providing for the integrity of fair and orderly trading of securities,” the SEC said.
The SEC also noted that the timely reporting of changes in beneficial ownership in securities was an important requirement to prevent insider trading and creeping acquisitions of securities, and allow the public and the commission to monitor critical information.
“Excuses such as inadvertence is self serving and unverifable. If such excuses are allowed, then the whole system of reportorial requirements designed to ensure transparency and fairness in the securities market would be undermined,” the SEC said.
San Miguel later sold its Meralco shares to JG Summit Holdings Inc. in 2013.