Philippine Stock Exchange

Abra Mining fined P560 million for trading fraud

Ralf Rivas

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Abra Mining fined P560 million for trading fraud
The SEC's Markets and Securities Regulation Department found Abra Mining guilty of violating the Securities Regulation Code and the Revised Corporation Code

MANILA, Philippines – The Securities and Exchange Commission (SEC) has imposed a P560-million fine on officers and the transfer agent of Abra Mining and Industrial Corporation for the unauthorized and fraudulent trading of unissued and unlisted shares from 2015 to 2019.

The SEC’s Markets and Securities Regulation Department found Abra Mining, owned by the Beloy family, guilty of violating the Securities Regulation Code and the Revised Corporation Code.

Regulators found discrepancies in the shares of Abra Mining lodged with the Philippine Depositary and Trust Corporation (PDTC). The total number of AR shares lodged with the PDTC totaled 258.96 billion but the total number of the company’s listed shares in the Philippine Stock Exchange (PSE) was only 72.95 billion.

Abra Mining’s total shares indicated in its registration statement was only at 95 billion, while issued and subscribed shares indicated in its corporate documents totaled 99.3 billion and 199.3 billion, respectively.

The SEC found that illegal issuances of shares reached 169.05 billion, covering 474 stock certificates between 2015 to 2019. These illegally issued shares were lodged and traded on the PSE in numerous transactions.

It was also found that officers “issued shares for less than their par or issued price, given that the company’s financial statements during the pertinent years did not reflect any inflow of cash as proceeds for the issuance of the shares.”

Found liable were: 

  • Abra Mining president James Beloy
  • Corporate secretary Amelia Beloy
  • Directors Conde Claro Venus, Carmelo Rafael Tansengco, Premy Ann Beloy, and Joel Beloy
  • Former director Belinda Gaskell

“[The officers and directors] necessarily had, or should have had, knowledge of the illegal circumstances regarding the issuances of the [illegal shares] during the years that they served as directors of respondent [Abra Mining],” the SEC said.

The Commission dismissed the denials and lack of knowledge interposed by its officers and directors, holding that their acts “can only be attributable to their gross negligence in the performance of their duties.”

Transfer agent, stockholders also guilty

In a separate decision, the SEC also found Abra Mining’s stock transfer agent, Asian Transfer and Registry Corporation and its officers, guilty of violating the Securities Regulation Code.

An investigation revealed that the transfer agent had falsely claimed that the shares were not faulty and could be lodged, even though they were aware of the flaws in the issuance of the illegal shares and their obligation to stop their lodgment.

Several stockholders of Abra Mining, namely Ferdinand Collado, Leila Collado, Susan May Gacelo, Jubileum Air and Sea Logistics, Incorporated, and Andrei Vincent Freight Services Corporation, are liable for violations.

The SEC found that these stockholders who acquired the illegal shares were liable for their participation in the fraudulent scheme. These stockholders also never paid the full price of the shares that they supposedly acquired via private placement.

The SEC has revoked Abra Mining’s registration statement. All of its officers, its transfer agent, and the concerned stockholders are also “disqualified from being a registered person and are prohibited from serving or acting as an employee, officer, or director of a registered financial intermediary under the supervision of the SEC within five years.”

Shares of Abra Mining were last traded on the PSE on March 3, 2021. –

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Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.