Logistics and remittance company LBC Express Holdings, Inc. said it will address concerns of the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE) about the company’s shortcomings which has led to the rejection of LBC’s proposed follow-on share offering.
In a clarification disclosed to PSE, LBC said it “hopes to continue engaging with both SEC and PSE to determine its options given the SEC Order, and hopefully arrive at a resolution addressing the concerns of the regulators, the Company and its stakeholders.”
LBC said SEC in an order “resolved to reject” the company’s registration statement for a follow-on offering of 69.101 million common shares “due to alleged absence and/or inaccurate disclosure in the company’s Prospectus.”
LBC said that based on the SEC order, the registration statement was rejected because the company failed to accurately or completely disclose the following material information: legal proceedings against the control persons of the company, and the status of the listing application of the company with the PSE.
SEC rejected LBC’s amended registration statement filed on March 21, saying that the Markets and Securities Regulation Department (MSRD), after reviewing the company’s registration statement, discovered pending cases filed by the Bangko Sentral ng Pilipinas (BSP) and the Philippine Deposit Insurance Corp. (PDIC) against persons of the company.
“LBC wilfully omitted the details of the pending criminal and administrative cases such as estafa and conducting business in an unsafe and unsound manner filed by PDIC and BSP against members of the Araneta family, among others. Based on records, the Aranetas are the control persons of LBC through LBC Development Corp. which is wholly owned by the Aranetas. The significance of the subject cases necessitates a full and fair disclosure, which LBC failed to do,” the SEC said.
In addition, SEC said “LBC failed to disclose the material information pertaining to the listing application of the LBC Private Placement Transaction.”
“LBC merely stated in its application that the listing covering private placement transactions [is] currently being reviewed by the PSE. However, the representation by LBC is contrary to the information obtained by MSRD from PSE. In its letter dated March 13, PSE confirmed that LBC’s listing application covering follow-on offering, backdoor listing shares [is] deemed voluntarily withdrawn effective August 15, 2016,” SEC added.
LBC said it “respectfully maintains its intention and desire to disclose all relevant information pertaining to the Company, which are required under the Securities Regulation Code.”
“In response to the SEC’s requirement, the Company had taken steps and measures to expand the scope of the information on the legal proceedings involving certain members of the Araneta Family. However, due to the timing of the submission, the SEC may not have had sufficient opportunity to consider these additional and expanded disclosures,” the company added.
LBC’s board on November 25, 2016 approved the re-launch of the follow-on offering of 69.101 million common shares and expects to use the net proceeds for general corporate purposes and working capital.