SEC En Banc Case No. 12-13-311 ABACORE CAPITAL HOLDINGS, INC., Appellant, -versus- COMPANY REGISTRATION AND MONITORING DEPARTMENT, represented by Acting Director Ferdinand B. Sales, Appellee.

COMMISSION EN BANC ecurities and Exchange Commission Republic of the Philippines Department of Finance

ABACORE CAPITAL HOLDINGS, INC..

Appellant,

SEC En Banc Case No. 12-13-311 For: Review of CRMD's

versus Governing Pre-Emptive and Imposition of Penalty under the SEC Amended Rules

Other Subscription Rights and

Dividends Declaration of Stock and Cash of Corporations

DEPARTMENT, represented by COMPANY REGISTRATION AND MONITORING whose Registered Securities Regulation Code or Listed in the Stock Exchange Securities under are the

Acting Director Ferdinand B. Sales, Appellee.

DECISION

2013 of the Company Registration and Monitoring Department (CRMD) Capital Holdings, Inc. (Abacore),' from the Letter dated November 27, For consideration of this Commission is the Appeal of Abacore

imposing a fine of P 62,000.00 against the Appellant. The CRMD found that the Appellant's changing of the record date from November 18, 2013 to December 12, 2013 (for a total period of 24 days) violates the " Amended Rules Governing Pre-Emptive and Other Subscription Rights and Declaration of Stock and Cash Dividends of Corporations whose Securities are Registered under the Securities Regulation Code or Listed in the Stock Exchange."

1 Hereafter referred to as "Appellant," or "Abacore," for brevity. 2 Hereafter, "Appellee," or "CRMD," for brevity.

Abacore Capital Holdings v. CRMD SEC En Banc Case No. 12-13-311 Page 2 of 6 Decision

FACTS OF THE CASE

Holdings, Inc.) is a domestic corporation with Securities and Exchange Commission (SEC) Registration No. 98789 and principal office at No. 28 Appellant Abacore, (formerly Abacus Consolidated Resources

N. Domingo St., New Manila, Quezon City. Abacore's primary purpose is that of a holding company. It is listed with the Philippine Stock Exchange (PSE) on October 28, 1987.

On October 18, 2013, the Commission issued a Certificate of

3,000,000,000.00 to P 5,000,000,000.00. A part of the increase in capital Approval of Increase of Authorized Capital Stock of Abacore from P

stock was through a stock dividend declaration in the amount of p 530,989,000.00 in favor of existing stockholders whose respective allotments will be determined after the record date has been set by the SEC.

On November 13, 2013, the CRMD received a letter dated November 12, 2013 from Abacore recommending that pursuant to the company's stock dividend declaration in the amount of P 530,989,000.00, the record date for such dividend declaration be set on November 18, 2013.

On November 15, 2013, the Commission, through the CRMD, issued an Order authorizing Abacore to issue 530,989,000 shares at the par value of P 1.00 to cover the stock dividends and the issuance of shares of stock to stockholders of record as of November 18, 2013 pursuant to the Amended Rules3.

In a letter dated November 18, 2013, Abacore informed the CRMD that the PSE disapproved the record date of November 18, 2013 on the basis of Section 6 of the PSE's Revised Disclosure Rules which states:

SECTION 6.1 DISCLOSURE OF RECORD DATE: The Issuer must set the record date in accordance with the Rules of the Securities and Exchange Commission and when appropriate, of the Rules of the Bangko Sentral ng Pilipinas. The disclosure of the record date must not be less than ten (10) trading days from the said date

Thus, the corporation recommends that the record date be set to December 12, 2013 and seeks the Commission's approval on the matter.

dated November 22, 2013, recommending that the change of record date CRMD elevated the matter to the Commission En Banc in a Memo

Cash Dividends of Corporations Whose Securities are Registered under the Securities Regulation Code 3 Amended Rules Governing Pre-emptive and Other Subscription Rights and Declaration of Stock and or Listed in the Stock Exchange or Amended Rule for brevity.

Abacore Capital Holdings v. CRMD SEC En Banc Case No. 12-13-311 Page 3 of 6 Decision

may be granted provided the corresponding penalty shall be imposed in accordance with the Amended Rules.4

the record date from November 18, 2013 to December 12, 2013 shall mean CRMD presented to the SEC En Banc that granting the change of

that the corporation will be in continuing violation of the said rules for a period of twenty-four (24) days from November 18, 2013. Thus, the fine imposable against the corporation shall be computed as follows:

Basic Penalty 50,000.00

+ P 500.00 per day of 12,000.00 (P 500.00 x 24 days) Total continuing violation P 62,000.00

change of the record date to December 12, 2013, subject to the payment of the penalty of P 62,000.00 as presented by CRMD in accordance with the aforementioned Rules. On November 26, 2013, the. Commission En Banc approved the The CRMD informed Abacore of the Commission's approval of its request for change of the record date, with the imposition of penalty.

Appeal "of the CRMD's imposition of penalty, praying that this Commission set the penalty aside. Aggrieved, Appellant Abacore filed on December 12, 2013 an

In its Memorandum of Appeal, Abacore argues that SEC-CRMD's November 27, 2013 Letter violates Appellant's:

failure to observe the deadline specified in Section 5 of the a Right to substantive due process because Apellant's

SEC Amended Rules for the Record Date was due to SEC- OGC's own failure to timely act on Appellant's June 27, 2013 Letter;

without previously granting appellant an opportunity to be (b Right to procedural due process for imposing a penalty

heard; and

without clearly stating the basis therefore () Right to procedural due process for imposing a penalty

4 Id.

Abacore Capital Holdings v. CRMD SEC En Banc Case No. 12-13-311 P age 4 of 6 Decision

Abacore requested for an exception to the applicability of Sections 2 and 5 of the SEC Amended Rules since Abacore wanted to issue (future) stock dividends for stockholders of record as of August 11, 2012. The PSE citing the SEC Amended Rules. Thus, Abacore requested SEC for an denied Abacore's similar request through its letter dated June 27, 2013, exception to the SEC Amended Rules. In its June 27, 2013 letter (filed with the SEC on June 28, 2013)

the issue.In support of its imposition of penalty, CRMD states that it proper. CRMD submits that Abacore's arguments in relation to the SEC- OGC's5 failure to act on Abacore's June 27, 2013 letter is not relevant to issue is whether or not the imposition of the penalty against Abacore is merely complied with the pertinent provisions of the Amended Rules CRMD quoted the pertinent provision of Section 5 (d) as: Meanwhile, in its Reply Memorandum, CRMD submits that the only

"The record date of such declaration shall not be less than ten (10) days nor more than thirty (30) days after all clearances and approvals by the Commission shall have been secured:"

On this point, Abacore countered that the CRMD misquoted the provision, when the Section 5 (d) should have read:

"The record date of such declaration shall be fixed by the Commission and shall be indicated in the Order which shall

after all clearance and approvals by the Commission shall not be less than ten (10) days nor more than thirty (30) days have been secured."

On this score, the Commission agrees with Abacore's observation.

the Amended Rules. It is the Commission that fixes the record date, The paragraph above quoted is the correct provision under Section 5 (d) of

indicated in an Order, which shall not be less than ten days nor more than

Barring any extraordinary circumstances, the date of approval of the thirty days after all clearance and approvals shall have been secured.

increase of capital stock shall be considered as the presumptive date when all clearance and approvals shall have been secured, from which the ten (10) to no more than thirty (30) day period shall be counted.

by this Commission is whether the penalty imposed by the CRMD In view of the parties' submissions, the sole issue to be determined

amounting to P 62,000.00 should.be set aside.

6 Amended Rules Governing Pre-Emptive and Other Subscription Rights and Declaration of Stock or Cash Dividends of Corporations whose Securities are Registered under the Securities and 5 Office of the General Counsel ("OGC") of the Securities and Exchange Commission.

Regulation Code or Listed in the Stock Exchange.

Abacore Capital Holdings v. CRMD SEC En Banc Case No. 12-13-311 Page 5 of 6 Decision

case: To rule on the issue, we refer to the following relevant dates in this

New Record Date as approved by the Commission Record Date as fixed by the Commission Abacore's Request to change the Record SEC's approval of the change of the Record Date to December 12, 2017 Order fixing the Record Date to November 18, 2013 date to December 12, 2017 Certificate of Approval of Increase of Authorized Capital Stock November 18, 2013 November 26, 2013 October 18, 2013 November 18, 2013 December 12, 2017 November 15, 2013

Order dated November 15, 2013 fixing the record date to November 18, be set on November 18, 2018. CRMD states that it promptly issued an 2013. 2013, a total of 28 days from October 18, 2013. The CRMD states that on November 13, 2013, it received a letter from Abacore (dated November Increase of Authorized Capital Stock was issued on October 18, 2013. 12, 2013) recommending that the record date for such dividend declaration while the Order fixing the record date was released only on November 15, This Commission observed that the Certificate of Approval of

certificate of approval of the increase of capital stock to the Order fixing the record date could be considered as unreasonable delay, since the This Commission is mindful that a period of 28 days from the

- than the 30 days from the approval of the increase of capital stock on mandated period for the record date should be not less than 10 to no more October 18, 2013.

On an ad hoc basis based on the sole reason of equity, the

the authorized capital stock and the date of the Commission's Order fixing the fact that in most instances, the date of the approval of the increase in Commission hereby sets aside the imposition of penalty. This is in light of

the record date are issued within two weeks, or in some instances, both are issued on the very same day. The Commission is also mindful that since the Order fixing the record date on November 18, 2013, was only released on November 15, 2013, Abacore could not have complied with Section 6 of PSE's Revised Disclosure Rules which requires the disclosure of record date not less than ten (10) trading days ahead of the record date, thus:

Issuer must disclose to the Exchange dividend declarations as SECTION 6. Disclosure of Dividend Declarations - The

Abacore Capital Holdings v. CRMD SEC En Banc Case No. 12-13-311 Page 6 of 6 Decision

approved by its Board of Directors and shareholders in accordance with Section 4.1 above.

set the record date in accordance with the Rules of the Commission and when appropriate, of the Rules of the SECTION 6.1. Disclosure of Record Date - The Issuer must Bangko Sentral ng Pilipinas. The disclosure of the record date must not be less than ten (10) Trading Days from the said date.

Commission may, motu propio, set the record date for stock dividends for corporation to submit its recommendation for the record date. In fact, the as long as the date complies with the periods under Section 5 (d). In this Under the Amended Rules, it is not mandatory for the applicant

Since the primary cause for the changing of the record date is the delayed Abacore was not able to comply with the PSE's Revised Disclosure Rules. issuance of the Order, on equitable grounds, this Commission sets aside the penalty imposed in CRMD's November 27, 2013 letter. case, however, the Order fixing the record date was issued too late that

Monitoring Department for payment of penalties in the amount of 62,000.00 is set aside. granted, and the November 27;, 2013 Order of the Company Registration WHEREFORE, premises considered, the instant appeal is hereby

SO ORDERED

Pasay City, Philippines, 30 July 2019.

EM : AQUINO

person

aw NA 1W

ANTONIETA F. IBE Commissioner EPHYRO LUIS B. AMATONG Commissioner

JAVEY PAUL D. FRANCISCO VIN LESTER K. LEE

Commissioner Commissioner