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Business

Court of Appeals upholds SEC order on Phil-Asia Care

- Zinnia B. Dela Peña -
The Securities and Exchange Commission has scored a major victory after the Court of Appeals dismissed for lack of merit the petition filed by unlicensed pre-need firm Phil-Asia Care Plans Inc., questioning the legality of the cease-and-desist order issued against them by the SEC.

In junking the petition for certiorari, the Appellate Court rejected Phil-Asia’s allegation that SEC committed grave abuse of discretion when it issued an order prohibiting the company from further selling pre-need plans to the public.

In an order issued last Oct. 4, the CA said Phil-Asia failed to explain why it resorted to certiorari not appeal.

"Certiorari as a special civil action will not lie unless a motion for reconsideration is filed before the respondent tribunal to allow it an opportunity to correct its imputed errors. Petitioner did not file a motion for reconsideration of public respondents’ cease and desist order dated May 28," CA said.

Also, the CA said the certification of non-forum shopping was signed by Phil-Asia’s Vicente R. Afulugencia without a board resolution in violation of the Rules of Civil Procedure.

The filing of the petition for certiorari came after the SEC issued a closure order against Phil-Asia to further safeguard the interest of investors.

On the strength of the SEC order, the City Legal Officer of the Business Permit and Licensing Division of Pasig City withdrew the business permit of Phil-Asia and closed and padlocked the firm’s main office.

The issuance of the closure order was spurred by complaints that Phil-Asia continued selling pre-need plans to the public and collecting amortizations from plan-holders despite the issuance of the CDO.

Phil-Asia was directed to explain within 15 days from receipt of order why its certificate of registration should not be revoked for violation of the CDO.

As this developed, the SEC has warned the public anew against dealing with MIHI, MMC Investment and Financial Management Corp. and the Everflow Group of Companies which had all been issued a cease-and-desist order by the Commission for offering investment contracts without prior registration with the SEC.

Despite the existence of a CDO, the SEC has been receiving persistent reports that Multitel continues to accept investments from the public through conduit entities Everflow, Oneheart Multi-Purpose Cooperative and Star Enterprise Multi-Purpose Cooperative. Not one among the four firms is a registered securities broker or dealer.

SEC said it will not hesite to file contempt charges against officers of Multitel and its other conduit firms if they continue to sell investment contracts to the public in violation of CDO.

MIHI and Multitel are both owned by Saturnino and Rosario Baladjay. MIHI is registered as a holding company while Everflow is a management consultancy company owned by Felix and Iris Aquino.

According to the SEC, MIHI, Everflow, Oneheart and Star have interlocking stockholders, directors and officers who are connected in one way or another to the management or operation of Multitel.

The modus operandi of these firms is to attract investors by offering as much as 15 percent guaranteed monthly interest for a minimum investment of P10,000 or "double-your-money" rate in case the investor opts to avail himself of the 18-month lock-in investment scheme.

SEC said the legal requirement to register with the Commission any sale or distribution of securities within the Philippines is premised on the need to prevent fraud on investors or grave or irreparable injury or prejudice to the investing public.

To prevent the group from defrauding more investors, the SEC is considering revoking the respective corporate licenses of Multitel and its alleged conduit entities.

vuukle comment

APPELLATE COURT

ASIA

CITY LEGAL OFFICER OF THE BUSINESS PERMIT AND LICENSING DIVISION OF PASIG CITY

COURT OF APPEALS

EVERFLOW

EVERFLOW GROUP OF COMPANIES

MULTITEL

ORDER

PHIL

PHIL-ASIA

SEC

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