SEC Enbanc Case No. 07-09-171 Southwaters Marina, Country Club and Farm, Inc.

Securities and Exchange Commission SEC Bldg. EDSA, Greenhills, Mandaluyong City Republic of the Philippines

IN THE MATTER OF:

SOUTHWATERS MARINA, COUNTRY Club and Farm, Inc. (S.E.C. Reg. No. A1997-15379) For: Appeal SEC En Banc Case No. 07-09-171

Appellant.

Y u1Cs:b O L10 wmr 8 For consideration of the Commission is an appeal from the letter dated 01 DECISION

June 2009 of the Corporation Finance Department ("'CFD"? of the Commission denying the request for waiver of the penalty assessed against Southwaters Marina, Country Club and Farm, Inc. (the "Appellant").

As borne by the records, the foliowing are the facts of the case.

Commission. Two of these required reports are: The appellant is a reporting company required to file certain reports with the

1. Sworn certificate of the corporation's Corporate Secretary and

Compliance Officer on the attendance of its directors during the N Y 2. Sworn certificate on the extent of the corporation's compliance with 2008 board meetings; and its Manual on Corporate Governance for the year 2008.

In a letter dated 23 February 2009, the CFD directed the appelfant to file the two certificates and to show cause why it should not be held liable for violation of Section 54 of R.A. No. 8799, also known as the Securities Regulation Code ("SRC"), and of SEC Memorandum Circular No. 3, Series .of 2007.

In compliance, the appellant explained in its 06 March 2009 letter that it failed to submit the certifications because of some staff problem and financial difficulties that it was experiencing. The appellant, however, submitted a certificate of attendance of the directors during the 2008 board meetings.

The CFD found the reasons lacking in merit, and further stated that as a reporting company, the appellant should be familiar and strictly comply with its reporting obligations. Since it was the second time the appellant failed to file the Corporate Secretary's Certification, the appellant was assessed a penalty in the amount of Forty-Four Thousand Five Hundred Pesos (Php44,500.00).1

1 16 March 2009 Letter of CFD.

In Re: Southwaters Marma, Country Club & Farm, Inc. SEC En Banc Case No. 07-09-171, Page 2. of 4

attendance of its directors to the 2008 Board Meetings. penalty relative to the late filing of its Corporate Secretary's Certification on the On 16 April 2009, the CFD gave notice that the appellant has not yet paid the

financial position is being aggravated by the current giobal financial crisis. Ietter dated 23 April 2009, on the ground that it has not been earning, and its tight The appellant reiterated its request for waiver of payment of penalty in a

Current Report (SEC Form 17-C) on the appointment of its Compliance Officer, the appellant was reprimanded pursuant to the 2005 Consolidated Scale of Fines.2 The Considering that it was the first time that the appellant was late in filing its

directive to pay the assessed penalty relative to the late filing of the Corporate Secretary's Certification on the attendance of the directors in the 2008 board meetings was likewise reiterated.

spared from paying the penalty. The request was denied in a CFD letter dated 01 The appellant, in its ietter dated 21 May 2009, again requested that it be

June 2009.

Hence, the instant appeal.

The principal issue in this case is whether there is a valid reason to waive the penalty assessed against the appellant.

We rule in the negative.

Memorandum Circular No. 3, Series of 2007 provides in part:

Corporate Governance required of (a) Associated Persons of Broker Dealers, Companies, and Pre-Need Companies shall follow the format of SEC Form and(b)Compliance Officers of Transfer Agents, Investment Houses/Underwriters,ListedIssuers, MCG -- 2002 and shall be submitted every 30th day of January. "Section 15.` The certificate of compliance with the Manual of RegisteredIssuers, Financing

Houses/Underwriters, Listed Issuers, Registered Issuers, Financing and shall be submitted every 3oth day of January ." the board of directors of Broker Dealers. Transfer Agents. Investment Companies and Pre-Need Companies shall be signed by the corporate secretary, and countersigned by the chairperson of the board of directors, Section 16. The certificate of attendance of directors in meetings of

the Commission are provided in Section 54 of R.A. No. 8799, to wit: The sanctions for violation of any of the provisions of the rules or orders of

hearing, the Commission finds that: (a) There is a violation of this Code, its rules, or its orders; x x x it shall, in its discretion, and subject only to the "sEC. 54. Administrative Sanctions. - 54.1. If, after due notice and

2 SEC Memorandum Circular No. 6, Series of 2005.

In Re: Southwaters Manria, Country Club & Farm, Inc SEC En Banc Case No. 07-09-171, Page 3 of 4

limitations hereinafter prescribed, impose any or all of the following sanctions as may be appropriate in light of the facts and circumstances:

(i) Suspension, or revocation of any registration for the offering of Securities:

thousand pesos (P2,000.00) for each day of continuing violation; (ii) A fine of no less than Ten thousand pesos (P10,000.00) nor more than One million pesos (P1,000,000.00) plus not more than Two

reguiation administered by the Commission; to file reports under Section 17 of this Code or any other act, rule or (iii) In the case of a violation of Sections 19.2, 20, 24, 26 and 27, disqualification from being an officer, member of the Board of Directors, or person performing similar functions, of an issuer required

three (3) times the profit gained or loss avoided as a result of the purchase, sale or communication proscribed by such Section; and (iv) In the case of a violation of Section 34, a fine of no more than

(v) Other penalties within the power of the Commission to impose."?

We need not belabor that fact that the appellant failed to submit the above- mentioned certifications, and even admitted that it failed to file the reportorial requirements of the Commission within the prescribed period. The record, however is bereft of any evidence that would justify the waiver of the fine imposed against the appellant. As borne by the records, this is the second time the appellant was Iate in filing the required certification from the Corporate Secretary. Also, the claim of the appellant that it is in dire financial condition fails to convince, which does not merit the relief prayed for.

reportorial requirements of the Commission, considering the paramount interests of the investing public. These reguirements are meant to assure full, fair and accurate information for the protection of investors.4 These reports also serve as a basis for As a reporting corporation, the appellant is expected to comply with the

the investors to make an informed investment decision, and to make them aware information asymmetry between the insiders or those who run the corporation on one hand, and the investors on the other hand. that the responsible officials of reporting corporations are operating in accordance with the applicable laws, rules and regulations. Moreover, this is to address the

appeai is DENIED for lack of merit. Consequently, the appellant SOUTHWATERS issued by the Corporation Finance Department is hereby AFFIRMED and the instant WHEREFORE, foregoing premises considered, the letter dated 01 June 2009

.4 Union Bank of the Philippines vs. Securities and Exchange Commission, G.R. No. 138949, 3 For specific violations and the corresponding penalties, refer to the Consolidated Scale of Fines, SEC Memorandum Circular No. 6, Series of 2005. 06 June 2001

SEC En Banc Case No. 07-09-171, Page 4 of 4 In Re: Southwaters Marnia, Country Club & Farm, Inc.

the attendance of its directors to the 2008 Board Meetings, within ten (10) days from receipt of this Decision. MARINA, COUNTRY CLUB ANd FARM, INC. (S.E.C. Reg. No. A1997-15379) is hereby DIRECTED TO PAY the aSSeSsed penalty of FORTY-FOUR THOUSAND FIVE HUNDRED PESOS (Php44,500.00) for the late filing of its certification on

SO ORDERED.

Mandaluyong City; 12 January 2012

4

TERESITA J. HERBOSA Chairperson

Q0 MA.XUANITAE.CUHTO Commissioner RAUL J. PALABRICA Commissioner

MANUELHUB A: O B.GAITE YM. JALA

Commissioner Commissioner