The Securities and Exchange Commission (SEC) has denied an appeal by NOW Corp. and Chairman Mel Velarde, affirming a P1-million fine each for allegedly disclosing misleading information to the public in violation of securities laws.
The SEC, in a 23-page decision, dismissed the appeal for “lack of merit” and upheld a previous ruling by its Enforcement and Investor Protection Department (EIPD).
The regulator also directed the EIPD to investigate whether other members of the NOW’s board of directors should be held personally accountable for the incident.
The case originated from a November 2021 disclosure following news reports that the National Telecommunications Commission was seeking to resolve an alleged P2.6-billion debt in unpaid fees from NOW Telecom.
When the Philippine Stock Exchange queried the firm, NOW claimed it was not a party to the Supreme Court case and had no knowledge of specific details, citing the sub judice rule.
The SEC rejected this defense, noting that the P2.6-billion claim was a material fact because NOW Telecom accounts for 97.82 percent of NOW Corp.’s total assets.
The regulator said it was “incomprehensible for NOW to claim that it has no knowledge on the detail of the case” and labeled the disclosure “false or misleading.”
“Mr. Velarde, as chairman of both entities had actual knowledge thereof, or is pressured to know the same. For him to authorize or allow a disclosure claiming ‘no knowledge of the specific details’ is at a minimum, a reckless disregard for the truth and an extreme departure from the standards of ordinary care required of a director of a publicly listed company,” the SEC said.
NOW said in a separate disclosure to the stock exchange that it intends to appeal the decision with the Court of Appeals.
