PSE to take over assets of troubled brokerage firm
June 8, 2004 | 12:00am
The Securities and Exchange Commission (SEC) has authorized the Philippine Stock Exchange (PSE) to take over the assets of broker firm Marino Olondriz Y Cia to ensure the settlement of the latters liabilities to its clients.
The SEC said Marino Olondrizs financial condition has so deteriorated that it cannot meet the demands of its customers for the delivery of securities and/or payment of sales proceeds.
In its June 3 order, the SEC said it is convinced that PSEs takeover of Marino Olondrizs operations "is justified in order to prevent further dispersal and dilution of respondents remaining assets."
Based on investigation conducted by the SECs Markets and Exchanges Department, liabilities of Marino Olondriz amounted to P84.64 million while its assets consist only of customer shares lodged with the Philippine Central Depository Inc. amounting to P2.13 million, 50,000 PSE shares, PSE trading rights and an undetermined amount of stock certificates.
The MRD said Marino Olondrizs books and records remain unreconciled and can no longer be reconstructed. The brokerage house had also abandoned its principal office in Binondo and retrenched its employees.
It noted that despite having been suspended from trading, the securities instruments still within Marino Olondrizs possession are being traded on the market until the MRD informed the PSE of such fact on Dec. 2003. The PSE immediately issued an order to broker-dealers to stop dealing with securities held by Marino Olondriz.
Moreover, the SEC said all claims of customers should be settled ahead of the PSEs takeover and that Marino Olondrizs PSE shares shall not be included among those assets that the PSE can sell to settle its liabilities alone.
Among the measures that Marino Olondriz could take to ensure the payment of customers claims include the following:
* settle liabilities to customers, the PSE and other trading participants through the sale of Marino Olondrizs trading right and other trade-related assets, liquidation of paid-up capital and/or overseeing the payment of claims against the surety bond.
* simultaneously inform the Securities Investor Protection Fund Inc. of the requested takeover and inform the broker firms customers that they may also claim compensation for losses from the SIPF, subject to the validation of their claims by the SIPF and PSE.
* apply the proceeds of the liquidation of the trading right and other trade-related assets of Marino Olondriz to pay its liabilities in this order: all expenses of the liquidation, customers, SIPF, and PSE.
The SEC said Marino Olondrizs financial condition has so deteriorated that it cannot meet the demands of its customers for the delivery of securities and/or payment of sales proceeds.
In its June 3 order, the SEC said it is convinced that PSEs takeover of Marino Olondrizs operations "is justified in order to prevent further dispersal and dilution of respondents remaining assets."
Based on investigation conducted by the SECs Markets and Exchanges Department, liabilities of Marino Olondriz amounted to P84.64 million while its assets consist only of customer shares lodged with the Philippine Central Depository Inc. amounting to P2.13 million, 50,000 PSE shares, PSE trading rights and an undetermined amount of stock certificates.
The MRD said Marino Olondrizs books and records remain unreconciled and can no longer be reconstructed. The brokerage house had also abandoned its principal office in Binondo and retrenched its employees.
It noted that despite having been suspended from trading, the securities instruments still within Marino Olondrizs possession are being traded on the market until the MRD informed the PSE of such fact on Dec. 2003. The PSE immediately issued an order to broker-dealers to stop dealing with securities held by Marino Olondriz.
Moreover, the SEC said all claims of customers should be settled ahead of the PSEs takeover and that Marino Olondrizs PSE shares shall not be included among those assets that the PSE can sell to settle its liabilities alone.
Among the measures that Marino Olondriz could take to ensure the payment of customers claims include the following:
* settle liabilities to customers, the PSE and other trading participants through the sale of Marino Olondrizs trading right and other trade-related assets, liquidation of paid-up capital and/or overseeing the payment of claims against the surety bond.
* simultaneously inform the Securities Investor Protection Fund Inc. of the requested takeover and inform the broker firms customers that they may also claim compensation for losses from the SIPF, subject to the validation of their claims by the SIPF and PSE.
* apply the proceeds of the liquidation of the trading right and other trade-related assets of Marino Olondriz to pay its liabilities in this order: all expenses of the liquidation, customers, SIPF, and PSE.
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