SEC orders seizure of Ogami assets

The Securities and Exchange Commission (SEC) has issued a writ of execution for the seizure of the assets of Japanese national Genta Ogami and other officials of G. Cosmos Philippines after they failed to pay the P57.18-million fine for the sale of fraudulent investment contracts.

Tomas Syquia, director of the SEC’s Compliance and Enforcement Department, said the 15-day deadline set by the Commission for the payment of the penalty expired last Monday, Jan. 21, hence prompting the SEC to resort to the asset seizure.

The P57.18-million administrative fine – the biggest penalty set by the SEC in its 65-year history – was slapped on G. Cosmos, headed by the controversial Japanese businessman Ogami, after the SEC served the company a permanent cease-and-desist order (CDO) last Jan. 7.

The CDO effectively stopped G. Cosmos from further recruiting members for its so-called advertising and marketing strategies, which the SEC said is an illegal scheme since it involves unregistered investment contracts.

Aside from G. Cosmos, Ogami and his business associates are in hot water over their buy-out of the medium-sized thrift bank Unitrust Development Bank last year. The bank forcibly closed down early this year after Ogami reportedly used its funds for his other businesses, causing an internal management rift leading a massive bank run.

Syquia added that aside from the seizure of assets, the failure to pay the fine as well as return the investments made by its estimated 30,000 members in the Philippines would cost G. Cosmos its corporate license and lead to the blacklisting of its officials.

G. Cosmos was registered with the SEC on Aug. 8, 1999 primarily to undertake advertising campaign plans under its so-called G. System created by Ogami himself. The company, which is headquartered at the Madrigal Business Park in Muntinlupa, is 30 percent owned by Japanese nationals Ogami and Takahiro Yokoi while its local incorporators include Anselma Calima, Dolores Cuneta and Wilfredo Cuneta of Las Piñas.

Under the G. System, the company collects money for advertising from the average consumer for its mail order sales business. The money collected is used to conduct mail order sales in Japan through newspaper, television or magazine ads and profits are paid directly to the people who have paid for the advertising costs.

The SEC based its penalty on an administrative fine of a minimum of P10,000 under Sec. 54 of the Securities Regulation Code for each violation corresponding to the number of entries booked by G. Cosmos from its members as of July 9, 2001, totalling 5,178.

Last year, G. Cosmos officials had offered a cash settlement of P200,000 which was later increased to P500,000 to settle the case as likewise provided for under the SRC but in both instances, the SEC rejected the offer after it computed the minimum settlement amount at P4.05 million.