In the interest of fair play, Typewriter Fiend is printing in full the Security and Exchange Commission’s (SEC) letter about a 22 August 2024 column by the author concerning the underwriting of a planned follow-on offering by DITO CME Holdings Corp. titled “SEC’s Slip Shows.”
MR. WILLIE FERNANDEZ
Publisher/President and CEO
DAILY TRIBUNE
3450 Concept Building, Florida Street, Makati City
Dear Mr. Fernandez,
We write regarding an opinion published under the “Typewriter Fiend” column of Mr. Chito Lozada in the DAILY TRIBUNE, which unwarrantedly assailed the regulatory action taken by the Securities and Exchange Commission (SEC) on the follow-on offering (FOO) of DITO CME Holdings Corp.
The opinion, titled “SEC’s slip shows” and published on the DAILY TRIBUNE website on 21 August 2024, stated that the planned FOO of DITO CME Holdings was “shaking the foundations” of the Commission “amid suspicions of a sweetheart deal.”
The opinion cited information from a supposed “SEC insider” who made an exaggerated claim of a “heated discussion” among members of the Commission En Banc, following concerns raised by one Commissioner regarding the underwriting commitment of BDO Capital & Investment Corporation for the public offering.
The opinion erroneously claimed that the “bank underwriter was allowed, through the SEC approval, to withdraw its obligations if the issuer is unable to sell or market its shares,” placing investors “at the losing end.” It added that the underwriting “involved an element of deception since the underwriter can always opt out under the terms provided.”
The Commission strongly condemns the utter falsehoods and malicious insinuations, in the guise of an opinion, to which DAILY TRIBUNE undeservingly gave credibility by the mere fact of its publication in its newspaper and news website.
Such libelous statements did not only tarnish the reputation of the Commission; worse, the statements unfairly imputed deception on both the issuer, DITO CME Holdings, and the underwriter, BDO Capital.
The Commission works tirelessly to encourage corporations to go public to raise the necessary funding to unleash their growth potential and thereby generate more employment opportunities for Filipinos. In parallel, the Commission has done everything within its power to make the capital market accessible to Filipino investors, to build confidence in them to invest their hard-earned money in the capital market, and to keep them away from fraudulent investment activities.
A single article, founded on an anonymous source and unverified information, could potentially reverse the reforms that the Commission and other institutions have championed to transform the Philippine capital market into a trusted and reliable platform for fundraising and investing.
Considering the gravity of the damage caused by the irresponsible journalism practiced by no less than the executive editor of DAILY TRIBUNE, those responsible must face the legal consequences of their actions. We are presently evaluating all available remedies before the appropriate fora, consistent with the Commission’s unwavering commitment to protect the integrity of the capital market.
In the meantime, in the best interest of the investing public and other stakeholders of the Philippine capital market, the Commission finds it necessary to correct the falsehoods contained in the opinion.
First, it must be clarified that the effectivity of the registration statement filed by DITO CME Holdings for its planned FOO remains subject to the company’s compliance with certain conditions and requirements, and to a final review by the Commission. Until then, DITO CME Holdings may not proceed with its FOO.
With regard to the Underwriting Agreement between DITO CME Holdings and BDO Capital, there is no provision in said agreement, as well as in the prospectus, that will allow BDO Capital to unilaterally, and at its own discretion, withdraw its underwriting commitment in the event DITO CME Holdings is unable to sell or market its shares in the FOO, after the commencement of the offer period.
The Underwriting Agreement, along with the other requirements submitted by DITO CME Holdings to the Commission, underwent thorough and careful review by the SEC Markets and Securities Regulation Department. The result of the review guided the Commission En Banc in its own review of and deliberation on the proposed FOO. (To be continued)