File photo from AFP
MANILA, Philippines – The Court of Appeals (CA) cleared businessman Roberto Ongpin of insider trading of Philex Mining Corporation shares back in 2009.
The decision reversed a Securities and Exchange Commission (SEC) en banc ruling in July 2016 which prohibited Ongpin from becoming part of the board of any Philippine Stock Exchange-listed firm.
The SEC had also ordered Ongpin, a former trade minister under the late dictator Ferdinand Marcos, to pay a fine of P174 million, or P1 million each for 174 counts of insider trading.
"The decision dated July 8, 2016 of respondent, finding petitioner [Ongpin] liable for committing 174 counts of insider trading under Section 27.1 of the Securities and Regulation Code is hereby reversed and set aside. The administrative charge against petitioner is accordingly dismissed," reads the CA decision penned by Associate Justice Maria Luisa Quijano-Padilla.
The court ruling was promulgated last December 1 and released on Tuesday, December 12.
The SEC had accused Ongpin of insider trading when he accumulated then sold a big block of Philex shares to Manuel Pangilinan-led First Pacific, with the prior knowledge of an agreed upon price at which to sell the shares.
Ongpin acquired his first block of Philex Mining shares from Banco de Oro in 2007. He then acquired additional shares held by John Gokongwei and Manuel Zamora.
In the morning of December 2, 2009, Ongpin, through Golden Media Corporation, bought another block of almost 50 million shares at P19.25 each, from the open market.
That evening, Ongpin sold his 550 million shares for P21 apiece to Two Rivers Pacific Holdings Corporation, a subsidiary of First Pacific. This gave First Pacific control over Philex.
In coming to the decision, the CA noted it was well-publicized beforehand that First Pacific intended to take control of Philex.
The CA added that it found "no merit in the Office of the Solicitor General (OSG) contention that the price of P21.00 per share and the date of the intended block sale are material since the price of Philex shares went down from P19.00 on December 2, 2009 to P17.75 or about 20.5% within two days after the sale in favor of First Pacific."
While the OSG alleged that the drop in price was a "red flag," the CA said the OSG later admitted Philex share prices went up in the first place because of the bidding war between First Pacific and Ramon Ang's San Miguel Corporation prior to the sale.
"Based on the premise that it was the active speculation of the investing public which triggered the steady increase in the price of Philex shares, we reckon that the public disclosure of the December 2, 2009 sale in favor of First Pacific simply ended all aggressive speculation, and this inevitably lead to the drop in the market price of Philex shares," the CA said.
"Guided by the foregoing, the alleged material nonpublic information which are the price of P21.00 per share and the date of intended block sale are indeed not 'properties' of Philex as these were all part of the negotiations which are, admittedly, privately done between [Ongpin] and Mr Pangilinan," it added.
"Hence, it is apparent that such information was not attributable to Philex and it could not be considered to have been acquired by petitioner from his insider relationship with Philex. There being no material information involved, petitioner can be said to be trading only upon his own intentions."
While the SEC's July 2016 decision barred Ongpin from holding a seat on the board of any listed firm, a temporary restraining order obtained shortly after the ruling allowed him to remain as chairman of online gaming firm PhilWeb and energy firm Atok-Big Wedge.
Ongpin eventually sold all his shares in and resigned as chairman of PhilWeb after President Rodrigo Duterte tagged him as an oligarch to be "destroyed."