SC affirms P2-M fine vs coal firm

THE Supreme Court (SC) has affirmed the P2-million fine imposed by the Securities and Exchange Commission (SEC) on Abacus Coal Exploration and Development Corp. for committing material deficiencies and misstatements in its audited financial statements for 2008 and 2009.

In a 13-page decision promulgated on Oct. 22, 2025, and made public on Monday, the High Court’s third division denied the petition for review filed by the coal firm, ruling that it failed to record significant assets and equity despite obtaining regulatory approval for a capital increase.

The court noted that the firm neglected to list coal mining rights worth roughly P2.7 billion as assets on its balance sheet, which resulted in a massive understatement of its actual value. Instead, the company chose to disclose the details only within the notes of its financial statements, a move the court found “insufficient” to meet legal transparency standards.

Associate Justice Maria Filomena D. Singh, writing for the court, said that such omissions “undermine the reliability of financial disclosures” and defeat the purpose of reporting rules.

“The values of these line items should be reported in order to aid its user or future investors in making sound decisions,” the decision read. The SEC had previously determined that the company’s reporting failure led to significant “material misstatements” by ignoring the impact of its increased capital stock. Abacus Coal argued it acted in good faith, but the tribunal said “the information disclosed in the Notes do not satisfy the requirements prescribed under the law.”

The finalized P2-million penalty covers two years of noncompliance. — Erika Mae P. Sinaking