Modus Operandi

JOSEPH H. CALATA, chairman and CEO of Calata Corp., made history by becoming the youngest business tycoon in the country and by proving once and for all that there’s money in agriculture. How he did it? By turning his family-owned agribusiness into the Philippines’s largest distributor of agro-chemicals, feeds, fertilizers and seeds and get it listed with the Philippine Stock Exchange.

The story was that Calata Corp. was the No. 1 company in the field of distribution of agricultural supplies. That was a sweet story but most people in agriculture business where scratching their heads back then. What in the world is Calata Corp. and who is Joseph Calata, billed as the company’s chief executive officer? No one has ever heard about him.

Calata held an IPO on May 23 at an offer price of P7.50 per share. Since its IPO, Calata shares rose by a cumulative 226% to a peak of P23.95 per share, its market closing price on June 4. The SEC investigated the strange movement in Calata’s share price. The SEC said it found conspiracy among the respondents because their trades “were clearly coordinated and intended to have a significant impact.”

I could mention a lot of names plus brokerages who participated on this as well as those who have ties before to PSE but as I have mentioned earlier na I edited this blog post as per the advice of some people. I will mention names of people na out na naman sa public yung pangalan. Zulueta is the CEO of Absolute Traders & Consulting Services Inc., the financial advisor of Calata when it conducted an initial public offering (IPO) in May. He was also shareholder of Calata prior to the IPO. The SEC said the respondents “traded Calata shares from May 23 to June 8, 2012 through multiple brokers to intentionally and unlawfully raise the price of the said shares through illegal schemes such as as ‘painting the tape,’ ‘hype and dump’ and other methods for their own profit.” The schemes allowed the respondents to sell 86.99 million Calata shares during the period, earning P216 million, which provided them more funds to continue manipulating the price of Calata even beyond the period. Zulueta and the other pre-IPO shareholders accounted for 32.95% of the volume of Calata shares bought, and 38.47% of those sold.

The charges were filed before the Makati City Regional Trial Court but for some magical reason Dept. of Justice later on directed the withdrawal of the charges in the RTC against all involved including Zulueta and Joseph Calata.

Tax evasion charges were filed by the Bureau of Internal Revenue against Joseph Calata, president and chief executive officer of agriculture products distributor Calata Corp. The BIR found out that Calata had wilfully attempted to evade and defeat his tax liability and deliberately failed to supply correct and accurate information in his annual income tax return for taxable year 2011. For taxable years 2009 and 2010, Calata paid P10,000 in taxes while in 2011, he paid only P100,000 despite a huge increase in his paid-up capital investment in Calata from P600,000 in 2010 to P217.7 million in 2011.

Okay, this one is crazy. He invested 600,000 pesos in Calata and it grew into 217 Million.  He invested in 2010, he only had P600,000 investment. But in 2012, his investment became P217,699,944. This is line inspect element sa COL Financial port ninyo but in real life. This is hash tag I’m blessed in real life. This is hash tag Bear market is not real in real life. (If you can’t relate with this, just go and read my Trick and Tactics: Evil blog). Joseph Calata declared equity of P600,000 in Calata Corp whish is so crazy bakit napayagan mag IPO ang Calata in the first place noong 2012.

From 2005 to 2011, Calata’s reported income amounted to P2.76 million whereas investments for 2011 amounted to P217.1 million. As such, the BIR had said his declared income was not adequate to justify the amount of additional investments he made for 2011.

Panahon pa ito ni Kim Henares if naaalala ninyo. If naalala ninyo hinabol henares si Manny Pacquiao

Calata  had argued that the money was sourced from several loans, consolidated in seven promissory notes/cash vouchers taken from his mother Isabel Calata from April to July 2011 for a total amount of P232 million. The BIR doubted the mother’s capability to lend such huge amount, as she has had no history of income tax payments in Bulacan.

DOJ resolution said that after a careful analysis of the evidence and applicable laws, it found “insufficient evidence” to charge respondent for violation of the National Internal Revenue Code. Justice Department dismissed the complaint filed by the Bureau of Internal Revenue against president and chief executive Joseph Calata for lack of probable cause.

Yung pagka dismiss ng kaso ni Joseph turned him into somewhat of a superstar again. Sumikat na naman ulit ang Calata stock that time. There were even articles that said na magkakaso si Joseph dahil nabahiran ang kanyang malinis na pangalan.

Calata went on its business until naulit na naman ang problema with them hyping up a casino deal while secretly selling their shares until such time na na delist na nga sila. Had the Calata affair happened in the US or some other major country, the retribution would have been far more severe, given the clear signs of conspiracy and manipulation.

If people na nasa video sa taas knew about this details or this information before, I think kahit ano pang hype ng Casino plans or kung ano man ay magdadalawang isip talaga sila na pasukin or hayaang manatili ang pera nila sa Calata. Its a failure of PSE/SEC at the same time failure din ng mga investor na mag research.

So ano ang lesson na sinasabe ko? Here it is.

You will never have more information than the company owners or the big institution/brokers sa stock market. You as a retailer is an outsider. Mostly nga sa news ka lang naka rely. Ano ba ang news? Sample may merger ang SM at JFC. Sino unang makaka alam nito? Mga tao sa higher position sa JFC at SM.Next, mga friends at kapamilya nila. Sino sunod makaka alam. Mga tao sa baba. Sunod eh mga kakilala at kapamilya nila. Next eh mga tao sa PSE. Sunod eh mga kakilala at kapamilya ng mga yun. Next eh mga insti/brokers. Sunod dun eh mga journalist. Sunod dun eh mga kamag anak o kakilala ng mga journalist. Last eh ikaw na retailer na nag aabang sa PSE edge o sa dyaryo thinking na may edge ka or nauna ka. Same goes kapag may masamang balita. Mauuna pa rin sila at mahuhuli ka. I shake my head sa mga traders na nag aabnag sa PSE edge thinking na may edge sila sa ganun. Only edge you will have will be on your fellow retailer trader din na mas huli kesa sayo.

But….this is a big but….

If you have bought Calata Stock using Technicals. Let us say you used MAMA which is one of the strategies taught in TL. Look at this: