This Wednesday saw the filing of criminal charges against Calata Corporation by the Philippines Securities and Exchange Commission. The criminal charges were filed with the Department of Justice and the reasons behind this decision is that the officials of the company have allegedly made several deceptive statements in relation to the integrated casino resort in Mactan, Cebu.
As it is known the project for the casino resort is still in the work and it is estimated to cost as much as P65 billion to its developer. Calata Corporation is being charged with violations of Section 24 and 54.1 of the Securities Regulation Code, part of the Republic Act. Among the people who face penalty are the President and Chief Executive Officer Joseph Calata, Corporate Secretary Marie Fabella, and Benison Paul De Torres, who is Chief Financial Officer and Chief Operations Officer. Also among the affected by the charges are Independent Directors Fr. Conrado Zablan and Edmund Solilapsi, as well as Directors Johnny Uy and Halmond Parker Ong.
The issue with the integrated resort which is being planned is that the Securities and Exchange Commission had already taken exception to the disclosure made by Calata. Back in August last year, the company announced that it is going to secure a gaming license with the help of the Philippine Amusement and Gaming Corporation (PAGCOR). The license would have been used for the Mactan Leisure City project even though the application had been denied on 16th May 2016.
Disclosure Commotion
The reason why the license application was rejected was that the integrated resort could not oblige the requirement of at least 50 hectares of land which is needed for issuing new casino licenses. As it was confirmed the project was going to cover only 14 hectares and this was not even close to the needed minimum. Another reason which prevented the regulator from issuing a license for operation is the fact that there is another casino operator already in operation in the region. Waterfront Hotel and Casino is responsible for a big part of the tax revenue of Mactan and the rates of interest are high.
The deceptive nature of the disclosure was caused by the statement of the company which left the impression that there was still a plan for construction at that time. In reality, the said disclosure is that by 2017 they will have the chance to acquire that casino license and the Mactan Leisure City will be ready to welcome its first customers by 2020. This information was confirmed by lawyer Jos Aquino, Director of SEC Enforcement and Investor Protection Department.
In the meantime, the shares of Calata Corporation went through an increase in their price, as they cost P3.55 per share at the end of 23rd August 2016. This was a 28.16-percent jump in comparison to the amount listed the previous day when they reached P2.77. Positive disclosures such as this one often result in such increases in the rates which explained the swell. The company was recently removed from the list of PSE due to several violations of the rules for disclosures.
