The Securities and Exchange Commission (SEC) rejected again the appeal filed by NOW Corp. on the P1-million fine for allegedly misleading the public about a P2.6-billion debt owed by its subsidiary NOW Telecom.
The SEC’s Enforcement and Investor Protection Department, in an order dated Feb. 16, 2024, denied the request for reconsideration filed by NOW Corp. and its chief executive Mel Velarde for lack of merit.
It stemmed from the Nov. 11, 2021 disclosure made by Now Corp. stating the company had no knowledge of the details surrounding the motion filed by the National Telecommunications Commission (NTC) with the Supreme Court seeking resolution on NOW Telecom’s P2.6 billion liability representing unpaid supervision and regulation fees (SRF) and spectrum user fees (SUF).
The request for reconsideration, dated July 3, 2023, contested the SEC order issued on June 15, 2023, which found NOW Corp. and Velarde administratively liable for violation of Section 24.1(d) in relation to Section 54.1 of the Securities Regulation Code (SRC) for failing to disclose material information to the public.
The SEC, in its latest order, maintained that NOW Corp. and Velarde “cannot simply deny that they were unaware of the details surrounding the motion filed by the NTC.”
“To be simply dismissive about it and to nonchalantly disclose that ‘the company has no knowledge of the specific details surrounding the alleged motion field by the [NTC]…’ created a misconception to the investing public,” the SEC said.
It insisted that “such disclosure is misleading as NOW Corp. and Mr. Velarde are fully aware of the specific details surrounding the Motion or the Case, that is, the unpaid SUF and SRF of Now Tel with NTC.”
“In this connection, it is clear that there was concomitant failure on the part of NOW Corp. and Mr. Velarde to make full, accurate and timely disclosure of a material fact or information about securities as mandated compliance to a listed company constitute a violation of Section 24.1 (d) of the Securities Regulation Code,” the SEC said.
The SEC also dismissed as “unavailing” the claim of the Now Corp. and Velarde that the disclosure of the details surrounding the NTC motion would violate the sub judice rule.
“It must be emphasized that what sub judice rule prohibits is to give comments and disclosures pending judicial proceedings. In this particular case, NOW need not necessarily give its comment and disclosure regarding the motion pending with the Supreme Court,” the SEC said.
“What is required of NOW to disclose are ‘relevant information not reported in the news article’ which encompasses ‘financial results and other information which is material to investor’s decision.’ Hence, we do not find any application of the sub judice rule in this particular case,” it said.