MANILA, 24 April 2005 — A corporation organized mostly by overseas Filipinos had been fined for unauthorized sale of shares, the regulator Securities and Exchange Commission (SEC) has confirmed.

OFW Holdings International was ordered to pay a 1.84-million-peso penalty for the unauthorized sale of 1.6 million shares in the company, SEC records showed.

In a letter to OFW Holdings, the SEC said the amount was based on 184 transactions made in selling the shares, with each transaction carrying a penalty of P10,000.

“Based on the attached list of stockholders of the said letter, the company sold a total of one million six hundred twenty nine thousand seventy-nine (1,629,079) shares without a registration statement rendered effective by this Commission, in violation of Rule 8 of the Securities Regulation Code (SRC),” said the letter, dated March 8, 2005.

Norman Gacula, chief executive officer of OFW Holdings, claimed in an e-mail that the SEC “has not sent us an official letter.”

The letter, a copy of which was obtained by Arab News, was signed by SEC Director Justina Callangan and was received by a certain Manuel Lim on behalf of OFW Holdings International on March 10, 2005.

OFW Holdings International was directed to pay the P1.84 million penalty to the SEC via cash, manager’s check or cashier’s check within five days from receipt of the letter.

The SEC order was initially reported by the Manila Times on Feb. 22, the details of which were disputed by OFW Holdings.

In an e-mail addressed to he company’s members dated April 16, 2005, Gacula said the Manila Times report was “far from reality and a fabrication or outright false.”

The article in question erroneously reported the penalty as P4.36 million and Gacula said this fact was “ridiculous for a very small company with authorized capital of P16 million only.”

SEC records show there definitely was a penalty, although OFW Holdings president Rachel Garcia said to the OFW Holdings family, “I wish to allay your fears and doubts by saying that not everything you read in the newspapers is true.”

While computing the fine to be at least P4.36 million, the Times report quoted SEC Chair Fe Barin as saying that the final amount was still being reviewed and the pricing would depend on additional information the company submitted to regulators.

OFW Holdings was organized by overseas Filipinos, many of them based in Saudi Arabia and the United States.

The company aims to establish a bank for OFWs and their families with the money they would raise from selling the shares.

OFW Holdings wants to sell 1,570,921 shares to raise P7.85 million.

It plans to allocate P5.35 million of the potential proceeds of the share sale for the establishment of a microfinance bank in a third-class municipality. The sum covers the cntral bank's minimum requirement of P3.9 million for putting up a rural lending institution.

OFW Holdings said the bank will be owned and patronized by OFWs and will finance the reintegration of workers after the completion of their work contracts abroad.

The SEC said the firm’s violation was most likely not intended to skirt securities registration or to collect money fraudulently, but simply a result of the company’s unfamiliarity with SRC rules.