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It's final: SEC upholds ₱1-million fines vs NOW Corp., Velarde
It's final: SEC upholds ₱1-million fines vs NOW Corp., Velarde
Five years after the controversy erupted, the Securities and Exchange Commission (SEC) en banc has affirmed ₱1-million fines each against telecommunications firm NOW Corp. and its chairperson, Mel V. Velarde.
In a statement on Monday, Feb. 9, the SEC said it had denied NOW Corp.’s appeal and upheld the ₱1-million fines imposed on both the company and Velarde. They were initially charged with violating securities laws over a misleading market disclosure.
The SEC clarified that the penalties imposed are without prejudice to any subsequent liabilities that may be filed against the company’s directors.
The Commission also directed its Enforcement and Investor Protection Department (EIPD) to investigate the potential liability of other NOW board members, stating that this would “determine if they could be held accountable in their personal capacities.”
To recall, NOW Corp. issued a disclosure in November 2021 after an ABS-CBN News report said the government, through the National Telecommunications Commission (NTC), was seeking to recover alleged unpaid fees amounting to ₱2.6 billion from NOW Telecom.
When queried by the Philippine Stock Exchange (PSE), the company said it was not a party to the Supreme Court (SC) case and claimed it had no knowledge of the motion’s details, citing the sub judice rule.
The lack of details prompted the Commission to reject the firm’s defense, describing it as “a semantic evasion and collapses upon scrutiny.”
“Certainly, the public was not concerned with the procedural filing of the NTC motion, but was concerned with the alleged ₱2.6-billion liability,” the SEC said.
The Commission stressed that company disclosures must reflect the real substance of information, especially when a liability constitutes a material fact. Any “half-truth” disclosures, it said, are likely to mislead investors.
Meanwhile, Velarde’s liability stemmed from his role as a corporate officer, particularly after he claimed he was unaware of the multibillion-peso dispute. The SEC said he personally violated Section 24.1(d) of the Securities Regulation Code (SRC).