Joseph Calata explains why he’s selling a listed shell company
Bilyonaryo Joseph Calata has decided to sell 81 percent of Calata Corp. to publicly-listed Millennium Global Holdings Inc., saying he has put investors’ interest before personal financial gain.
In a statement, Calata said the board of directors decided “it would be in the best interest of the investing public to welcome new management which shall inject a new but related line of business into the company.”
Calata said ” it would appear that the company’s lack of experience in effectively complying with strict regulatory regulations might compromise public shareholders’ interest as a result of possible sanctions which may be imposed upon an erring listed entity.”
The Philippine Stock Exchange had suspended trading in shares of Calata due to multiple violations of the disclosure rules. In particular, Calata failed to immediately disclose the sale of shares of one of its principal officers. It was also found to have breached the “blackout rule” which prohibits its officers and directors from trading their shares on advance information.
“The management has always maintained that it has the ultimate responsibility over the welfare of its public shareholders,” Calata said.
Calata is spinning of its substantial assets and liabilities to a private firm to allow a new group to infuse a new business into the publicly-listed shell company.