Once the securities of a company is listed in an organized exchange such as the Philippine Stock Exchange (PSE), a listed company must conform with the listing and disclosure rules. Otherwise, the securities can be suspended or delisted if and when the PSE determines that the listed company failed to comply with the listing agreement. There are numerous conditions for delisting the securities of a listed company and the most prominent of which are the frequent failure to submit the structured reportorial requirements in accordance with the listing and disclosure rules, repeated failure to make the adequate and accurate disclosures, and the issuance of erroneous and deficient financial statements. Based on its latest press release, the PSE stated that the following securities of listed companies are suspended from trading for failure to submit an annual report for the year ended 31 December 2024 in violation of the structured reportorial requirements in accordance with the listing and disclosure rules. These are Abra Mining & Industrial Corporation (AR) suspended since 2021, Cyber Bay Corporation (CYBR) suspended since 2021, Globalport 900 Inc (PORT) suspended since 2014, IP E-Game Ventures Inc (EG) suspended since 2017, Manila Jockey Club Inc (MJC) suspended since 2023, MJC Investments Corporation (MJIC) suspended since 2023, Philab Holdings Corporation (DNA) suspended since 2018, Philippine National Construction Corporation (PNC) suspended since 2008 and Phoenix Petroleum Philippines Inc (PNX) suspended since 2024. The suspension from trading of the securities of these listed companies is for violating a basic listing and disclosure rule which is the submission of an annual report within the prescribed period of 105 days after the end of the fiscal year. Please note that after the lapse of the 3-month suspension period and the listed company remains non-compliant, the PSE must initiate delisting procedures. We do understand why the securities of these listed companies has been suspended but what we do not understand is why the uninitiated delisting procedures. The suspended securities of these listed companies have breached the 3-month suspension period threshold and should have been delisted and removed from the PSE official registry. Based on the listing and disclosure rules published as of January 2025, there is no clause which states that the PSE has a discretion not to initiate delisting procedures on a non-compliant listed company. It is worth mentioning that these listed companies in which securities were suspended from trading are either money-losing, non-operating or both. We can consider them as basura stocks and must be thrown to the garbage bin.
