SEC launches probe into Villar Land valuation
The Securities and Exchange Commission (SEC) has launched a fact-finding investigation into the valuation of trillion-peso Villar Land Holdings Corp., the local bourse’s most valuable stock, acting on allegations of insider trading.
SEC Chair Francis Lim told reporters on Friday they wanted to “dig deeper” into the facts that led to Villar Land’s whopping P1-trillion valuation before making any policy decision.
“What I don’t want to happen is for the SEC to act hastily, and at the end of the day, we commit a mistake,” Lim said during a press briefing at a Shareholders’ Association of the Philippines event.
“We cannot make judgements before investigating the facts … Was there insider trading? Was there manipulation? These are technical [and] legal issues,” he added.
Villar Land, whose trading has been suspended since May 16 for failing to file its annual report on time, is currently valued at P1.5 trillion, with its share price last closing at P2,296 each.
This is higher than conglomerate SM Investments Corp. (SMIC) of the billionaire Sy family, whose businesses span retail, banking and real estate. SMIC is valued at P995 billion with a share price of P810 each as of Friday.
According to Lim, they needed to take into consideration the integrity of the market, the damage to investors and “the reputation of the companies involved.”
“So let’s just be fair, be as objective as possible,” the chair said. “We will decide on the basis of the facts that we discover. I know there are already facts, but we have to dig deeper … If things end up in court, the court will decide on the basis of the facts and the evidence.”
For its part, Villar Land, owned by billionaire and former Sen. Manuel Villar, welcomed the fact-finding investigation, saying it remained committed to “transparency and compliance” with existing regulations of the SEC and the Philippine Stock Exchange.
“The company has consistently disclosed material developments and continues to coordinate with regulatory bodies regarding the status of its financials,” the company said in a statement sent to reporters over the weekend.
Last year, a big gain in the revaluation of its investment properties resulted in Villar Land’s earnings zooming to nearly P1 trillion from only P1.46 billion in 2023.
But while Villar Land’s net income is considered the largest recorded by a Philippine company so far, analysts pointed out that fair value gains were often not considered when evaluating earnings.
Villar Land said its financial statement was undergoing a “rigorous audit process,” including a “comprehensive review of the appraisal reports covering high-value properties.”
“This extensive audit is necessary to ensure the accuracy and integrity of the financial statements,” the company noted.
