PSE poised to suspend 7 firms for reportorial flaws

The Philippine Stock Exchange (PSE) has threatened to suspend the trading of seven listed companies for their failure to comply with the bourse’s structured reportorial requirements.

In a memo issued to brokers yesterday, PSE disclosure department head Trisha Zamesa said trading of shares of RFM Corp., Wellex Industries Inc., Uniwide Holdings Inc., Fil-Estate Corp., DMCI Holdings Inc., Banco Filipino Savings & Mortgage Bank and the APC Group will be suspended on July 16 unless these companies comply with the requirements on or before the said date.

These companies failed to submit on time 200 copies of their annual financial statements for the year ending December 2002.

The PSE charges a basic fine of P50,000 and another P5,000 per day for the delay in the submission of these requirements.

The exchange recently imposed stricter penalties for listed firms that violate disclosure requirements.

Under the new penalties, the PSE will publish the names of listed companies that will be found to have violated the exchange’s disclosure requirements. The penalties imposed on these erring companies will likewise be made public.

Under the existing PSE rules, listed companies are required to disclose developments within and outside the company that could influence the movement of their share prices to ensure the protection of investors. Several companies, however, have not been fulfilling the requirements on time.

To ensure a level playing field, the PSE is also considering imposing penalties on companies which disclose information to select investors or analysts prior to divulging the same information to securities regulators.

Citing Article 1, Section 3 of the Listing and Disclosure Rules, the PSE said: "Investors and the public shall be kept fully and accurately and timely informed by the applicant companies of all material factors that might affect their interests, and immediate and timely disclosure shall be made of any material information which might reasonably be expected to have an effect on the market activity and the prices of listed securities."

In a memo issued recently, the PSE said listed companies selectively disclosing material information to securities analysts, institutional investors or third parties ahead of the general public shall be treated as violating their disclosure obligations.

Listed companies face a trading suspension for failure to disclose corporate information which are published in newspapers until such time that it submits a report to the PSE.