Regulators launched an investigation on Abra Mining and Industrial Corp. for alleged trading of unissued and unlisted shares.
Abra Mining, led by the Beloy family, has four approved mining claims, including Bucay Baticang Limestone and Alluvial Gold Magnetite Project, Capcapo Gold Copper Project, Patok Gold Silver Copper Project and The Sanvig Alluvial Gold and Magnetite Iron Sand Deposits. The company has yet to start mining operations.
The PSE said it suspended the trading of Abra Mining shares on Thursday after determining that the number of fully paid issued and outstanding Abra Mining shares exceeded the number of its listed shares. The PSE said this was in violation of the rule that all fully paid issued and outstanding shares should be applied for listing.
Data showed the number of Abra Mining shares lodged with PDTC also exceeded the number of the company’s listed shares. The PSE said it was also in violation of its rule that only securities approved for listing should be lodged with PDTC for trading.
The PSE said this could mean that the “shares which are not yet reflected in the books of the company have been lodged with PDTC and are being traded, in contravention of the provisions of the Revised Corporation Code”.
A parallel preliminary fact-finding investigation by the SEC found that Abra Mining had 258.95 million shares lodged with PDTC as of Feb. 16, 2021.
The number exceeded by 186 million outstanding shares the 72.94 million shares the company listed with the PSE.
Records also showed that in its 2019 audited financial statements, Abra Mining reported issued and outstanding capital stock comprising 99.29 million shares.
Section 173 of the Revised Corporation Code defines outstanding capital stock as “the total shares of stock issued under binding subscription contracts to subscribers or stockholders, whether fully or partially paid, except treasury shares.”
The SEC said even shares, which have not been fully paid, are considered issued and should be reported.
It said records showed that each and every Abra Mining share that had entered the system was confirmed and cleared by the company’s transfer agent for lodgment.
“The SEC, in coordination with the PSE and PDTC, will continue investigating the issue not only to resolve the current incident but also to find system-wide measures to prevent its recurrence. In the meantime, Abra Miming was ordered to submit its proposed actions to address the discrepancies in its issued, outstanding, listed and lodged shares,” the SEC said.
The share price of Abra Mining hit a 52-week high of P0.013 per share in January from only P0.0035 as of end-December 2020.