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Eusebio Tanco declines nomination to PSE board

Businessman Eusebio H. Tanco on Thursday said he turned down his nomination as director of the Philippine Stock Exchange (PSE) for the board elections on July 1, citing issues raised against his brokerage Venture Securities Inc.

“Recent events which, unfortunately and unjustifiably, have besmirched the reputation of Ventures Securities and its officers and employees compel me, out of delicadeza, to decline the nomination for membership in the board of the exchange,” Tanco said in his June 16 letter to PSE Chairman Jose T. Pardo.

Tanco is a board member of the PSE since 2007, representing the brokers. His companies include STI Education Holdings Inc. and port operator Asian Terminals Inc.

“The exchange, after all, is bigger than any individual broker and it is my belief that all our efforts should be directed to the protection and preservation of the image of the exchange. My only wish is I or an acknowledgement that the real guilty parties will be called to account for this sorry state of affairs,” he said.

The Securities and Exchange Commission (SEC), meanwhile, has upheld the findings of the PSE’s independent audit, surveillance and compliance arm that Venture Securities violated multiple trading rules in facilitating transactions that eventually wiped out client shares in R&L Investments Inc.

In a decision dated June 15, the SEC en banc denied the appeal of Venture Securities to reverse and set aside the resolution issued by Capital Markets Integrity Corp. (CMIC), which found the stock brokerage in violation of the self-regulatory organization’s rules and imposed a penalty of P5.16 million.

The CMIC issued the resolution on July 10, 2020 following the discovery of fraudulent transfers of client shares from R&L to the account of Julieto Sulapas in Venture Securities.

Tanco said in the same letter that Venture Securities, of which he is chairman, intends to contest the findings of the special hearing panel of SEC, which ordered the revocation of the license of the brokerage firm in connection with its role in the fraudulent transactions of people connected with of R&L Investments.

“The investigation into the anomalous conduct of one Marlo Moron of R&L Investments has unnecessarily dragged Ventures Securities. Records show that Moron, acting as both trader and settlement clerk, in violation of the SEC rules for a brokerage firm, executed EQ trades indicating that he has the access code of R&L Investments to utilize the PCD [Philippine Central Depository] system,” Tanco said.

‘Fraudulent scheme’

Tanco said the fraudulent transfer took place exclusively within R&L and that no broker dealing with the shares of Julieto Sulapas would know that the shares do not belong to him.

“Venture was never involved in the fraudulent scheme of Moron and R&L and is, therefore, as much a victim as the clients of R and L.”

He said it was “a complete surprise” for his company that it became the subject of an investigation and has been made to appear as complicit in the anomalous schemes of Moron.

He also said for years, his brokerage has been audited by the CMIC and it has found no evidence of any wrongdoing. As a broker, he said Venture Securities had every right to be protected by the CMIC and to rely on CMIC’s findings.

The CMIC said it takes exception to the statements made by Tanco’s group against the body on its previous regular audit examinations and the lack of a finding of any wrongdoing on Venture Securities’ part.

“CMIC’s audit findings of any TP [trading participant], Venture included, should not be construed as relieving any such TP of its accountabilities and its responsibility to answer for its violations of the pertinent securities laws, and for matters which were and are within its power, control or management. Adopting effective internal/financial controls including compliance therewith and adherence to good corporate governance standards and practices are properly the responsibilities of the owners and management of a company, not its auditor.”

Read full article on BusinessMirror

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