Metro Manila (CNN Philippines, June 21) — The Securities and Exchange Commission (SEC) has slapped a ₱2 million fine against listed NOW Corp. and its chief executive officer following the group’s “misleading” disclosure regarding the ₱2.6 billion in unpaid dues of affiliate company NOW Telecom to the government.
In a decision dated June 15 and signed by SEC Director Oliver Leonardo, the regulator said NOW Corp. and its CEO Mel Velarde have to settle the penalty 15 days from receipt of the order.
The fine stemmed from NOW Corp.’s disclosure in November 2021, which stated that it “has no knowledge of the specific details” surrounding the alleged motion filed by the National Telecommunications Commission on the liability representing unpaid supervision and regulation fees and spectrum user fees.
The group, which showed interest to vie for the third telco slot years ago, also argued that Velarde and NOW Corp. were “persons with separate and distinct personalities” from NOW Telecom, so they should not be made accountable for the latter’s violation.
However, SEC disagreed.
“NOW Corp.’s claim that it made a full and accurate disclosure does not hold water,” it said.
SEC also dismissed the company’s justification as “untenable and completely misleading.”
The regulator stressed that Velarde holds key positions at NOW Corp. and NOW Telecom, which means he has “the ultimate control over the transactions of the corporate at the time the liabilities occurred.”
“There is a failure to make a full, accurate, and timely disclosure of a material fact or information about securities as mandated compliance prescribed to a listed company constitute a violation of Section 24.1 (d) of the Securities Regulation Code,” it said.
According to SEC, the Securities Regulation Code defines material fact or information as any fact or information that may result in a change in the market price or value of any of the issuer’s securities, or may potentially affect the investment decision of an investor.
