MPTV Jumps the Gun on Shareholders and SEC

NEWPORT BEACH — Officers of time-share resort operator MPTV Inc. twice have issued 50% more stock than the company’s shareholders have authorized and now find themselves in the embarrassing position of seeking regulators’ permission to do what they’ve already done.

The Newport Beach-based company already has come to regulators’ attention in a probe of foreign stock sales. MPTV is one of 16 firms whose records were subpoenaed last March by the Securities and Exchange Commission in its investigation of a Miami firm, Onyx Financial Group Inc.

Onyx specialized in raising money for small companies by selling their unregistered stock to foreign investors. The SEC is concerned that the rules governing foreign sales of unregistered shares might not have been followed in every instance, sources say.

Now MPTV says, in a filing with the SEC earlier this week, that it has been using its stock in large blocks to pay outside consultants and suppliers for their services. By Dec. 2, the company says, it had issued a total of 150 million shares--50 million more than authorized. The company issued 58.5 million shares in the first nine months of 1996 to cover about $2.9 million worth of consulting bills.

In its SEC filing, MPTV asked shareholders to increase its authorized shares to 200 million. MPTV officials could not be reached for comment. Several securities law specialists, however, said that while it is common for smaller companies to pay their bills with stock, it is rare for them to do it with stock their shareholders have not authorized.

In an earlier filing, MPTV warned that consultants paid with its stock might try to recover the purchase price of the shares plus interest, which could have a negative impact on the company’s finances.

Shares of MPTV, which operates time-share resorts in Las Vegas, rose by one cent Thursday to close at 5.4 cents. The stock has fallen from 31.75 cents a share in May.

MPTV said in its SEC filing that its management first became aware of a stock shortfall in May, and that the company’s directors approved raising the number of authorized shares to 100 million from 50 million. That increase was approved by shareholders at the time.

However, MPTV says it now has 1.52 million shares outstanding--52 million more than authorized in May. It is asking investors and the SEC to ratify that overage as part of the increase to 200 million shares.

If the new increase is approved, MPTV said, it will use the remaining 50 million authorized shares to finance future opportunities.