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SEC fines NOW Corp. P1M over 'misleading' info; firm to seek reconsideration

The Securities and Exchange Commission (SEC) on Wednesday said it has fined NOW Corp. P1 million over its alleged disclosure of "misleading information."

In a seven-page order, the SEC said the firm and its chief Mel Velarde were "administratively liable for violation of Section 24.1 (d) in relation to Section 54.1 of the Securities Regulation Code for disclosing misleading information to the public."

NOW Corp. and Velarde were fined with P1 million each for their supposed misleading disclosures, the SEC said.

According to SEC, the case stemmed from NOW's November 2021 disclosure that it has no knowledge on the details of the motion supposedly filed by the National Telecommunications Commission before the Supreme Court against NOW Telecom Company Inc. since it is not party to the case.

NOW Telecom is an affiliate of listed NOW Corp.

NTC's motion was in connection with NOW Telecom's P2.6-billion liability representing unpaid supervision and regulation fees (SRF) and spectrum user fees (SUF).

According to the disclosure, NOW Corp. should not be made accountable for NOW Telecom's alleged violations because NOW Corp. and Velarde are "persons with separate and distinct personalities" from the telecom firm.

The SEC, however, said it found no merit in NOW Corp. and Velarde's justifications.

“Such disclosure is misleading as NOW and Mr. Velarde are fully aware of the specific details surrounding the motion, that is, the unpaid SUF and SRF of [NOW Telecom] with NTC,” the order stated.

"Respondents' position that it has no knowledge of the specific details surrounding the alleged Motion filed by the NTC before the Supreme Court, it being not a party to the case, is untenable and completely misleading," it added.

"We reiterate and emphasize that Mr. Velarde was part of NOW Tel as far as the unpaid SRF and SUF liability of the company," it added, noting that Velarde was considered having ipso facto participated in the transactions” relating to the unpaid SRF and SUF liability of the firm.

In a disclosure to the Philippine Stock Exchange, NOW said it would file a motion for reconsideration against the SEC order.

The company also said it received a copy of the order from the SEC’s Enforcement and Investor Protection Department on June 19, 2023.

“NOW Corporation disagrees with the Order of the EIPD and shall file a motion for reconsideration,” the filing read.

NOW’s operating business segments include software licenses and services; information technology manpower and resource augmentation; and broadband and wireless cable television services.

It offers broadband networks, cloud hosting services, virtual private networks, multimedia content, online gaming, web hosting, cloud-based multimedia conference, cloud-based mail and messaging service, and electronic communications network and services.

Shares in NOW Corp. closed Wednesday down by P0.09 or 6.72% at P1.25 apiece. —with Jon Viktor D. Cabuenas/KBK/BM, GMA Integrated News