![Calata guilty of market manipulation - Makati court. In photo, Joseph Calata.](https://cebudailynews.inquirer.net/files/2024/06/Joseph-Calata-05June2024-1024x576.jpg)
Joseph Calata
MANILA, Philippines — For providing “misleading and exagerrated” claims over the supposed $1.4 billion Mactan Leisure City project that inflated the firm’s share price in 2016, Calata Corp. chair Joseph Calata and another company official were fined P8 million by a Makati court.
A May 28 court decision promulgated by Branch 148 of the Makati City Regional Trial Court found Calata and corporate secretary, compliance, and corporate information officer Jose Marie Fabella guilty of two counts of violation of the Securities Regulation Code.
They were ordered to pay P4 million each. Should they fail to pay fines due to insolvency, the officials will have to serve time in prison.
Meanwhile, the case against Michael Foxman—charged with the same violations—was archived as he “remained at large,” the Securities and Exchange Commission (SEC) said in a statement on Tuesday. Foxman is the CEO of Sino-America Gaming Investment Group LLC, Calata’s partner in the supposed integrated resort and casino project.
READ: Calata found guilty of market manipulation, says SEC
The regulator explained that the officials were penalized for giving out misleading statements to artificially jolt Calata’s share price, which is tantamount to market manipulation.
The court decision came about eight years after the SEC observed the sudden surge in the daily trading volume of Calata’s shares on Aug. 23, 2016.
‘Unfounded promises’
Trading volume rose by 2,455 percent that day, SEC noted. A 196.4-percent uptick was observed the following trading day.
The Aug. 23, 2016 disclosure said the Mactan Leisure City project was slated for 2020 opening, even describing it as a “game changer in the region’s family leisure tourism and gaming offering.” It was estimated to generate P55.74 billion in gross annual revenues.
READ: SEC upholds removal of Calata from PSE roster
But the court said the disclosure “contained unfounded promises and exaggerations,” noting that the statements were “not clearly referred to as mere forecasts and are couched and exaggerated to such extent that the public may be misled in thinking that the project would start its operations in 2020, generate a certain amount of revenue and entail job opportunities.”
The company made the announcement even without an application for a license with the Philippine Amusement and Gaming Corp. (Pagcor), according to the court.
The Philippine Stock Exchange (PSE) also subsequently asked Calata Corp. to clarify its partnership agreements for the project.
But the “trial court ruled that the subsequent disclosure was likewise misleading, as it contained no statement as to prior correspondence with Pagcor and whether or not an application for an integrated resort casino permit was already submitted,” the SEC noted.
The regulator noted that Calata and Fabella were also “found to be knowledgeable that the statements in the disclosures were misleading,” which means “intent to induce the trading of Calata Corp. shares may be inferred from the fact that they were disclosed to the public.”