PSE unit to return ‘intact’ shares of Equitiworld to clients
The market regulation arm of the Philippine Stock Exchange (PSE) will return certain shares of stock to some clients of embattled stock brokerage firm Equitiworld Securities Inc.
This follows the green light from the Securities and Exchange Commission (SEC).
In a memorandum dated June 11 and made public on June 16, the PSE said Capital Markets Integrity Corp. (CMIC) had found that some shares among Equitiworld’s assets were “intact.” This means the shares are not subject to ongoing investigation related to alleged discrepancies in the broker’s books.
The bourse added that CMIC was in the process of informing Equitiworld’s clients with intact shares ahead of a planned allocation of the company’s trade-related assets.
“These customers may finally transfer the identified intact shares to their preferred trading participants,” PSE said in its circular.
PSE also clarified, however, that the allocation plan has yet to be approved, and that the release of other assets—which may include other shares of stock, cash and dividends—would depend on such a plan.
This comes months after the SEC ordered CMIC to take control of Equitiworld’s assets, books and records to protect the broker’s customers. The SEC found that the company was “no longer capable to readily meet the demands” of customers.
The Commission cited a CMIC special audit that showed material discrepancies in the reported stock and cash positions of Equitiworld totaling 154.91 million shares worth P46.14 million.
As of end-June 2024, CMIC likewise found that Equitiworld did not have cash on hand. This contradicted the P23.57 million cash on hand balance generated from its system.
The company also failed to submit required audit documents and annual financial statements, among others, while reportedly refusing to comply with CMIC’s orders.
Consequently, CMIC suspended Equitiworld’s trading operations, citing its violation of the Securities Regulation Code for harming the interests of its customers.
