SEC files criminal raps vs Everflow owners

The Securities and Exchange Commission filed at the Makati Fiscal’s office last Monday a criminal complaint against the owners of the Everflow Group of Companies, led by Felix and Iris Aquino.

Tomas Syquia, head of the SEC’s Compliance and Enforcement Department, said the filing of the case against the Everflow Group is part of a series of complaints to be lodged by the commission against corporations allegedly used by Multinational Telecom Investors Corp. (Multitel) in perpetuating its activities.

The Everflow Group is said to be conduit of Multitel, which had been permanently enjoined by the SEC from further soliciting investments from the public. A cease-and-desist order (CDO) had been issued against Multitel and other conduit firms as early as January this year.

The Everflow Group has been promising investors monthly interest of 10 to 15 percent for a minimum placement of P50,000 for a period of three to six months plus the return of their investment at the end of the holding period.

The Everflow Group, however, denied selling any shares or investment contracts to the public at 10 percent to 15 percent interest.

Everflow director and merchant marine Capt. Felix C. Aquino said the company merely acted as Multitel’s financial accountant for a certain period of time.

Syquia said criminal complaints to be lodged against other conduit firms of Multitel will be filed during the first quarter of 2003.

Multitel was issued a cease-and-desist order (CDO) since January this year for offering investment contracts without prior registration with the SEC.

As a result of the issuance of the CDO, the management of Multitel set up a new company named Multitel International Holdings Inc. (MIHI), to continue the group’s sale of securities to the public. Most of Multitel’s placements and accounts were transferred to MIHI.

Other companies said to be used by Multitel in soliciting investments from the public and are covered by the CDO are Partners in Progress Holdings Inc., Sage Management Corp., CUP Multi-Purpose Cooperative Inc., Multilink Multi-Purpose Cooperative Inc., Oceanic Employees, Bethel Multi-Purpose Cooperative, Goodwill Development Cooperative, and Handog sa Pag-unlad Multi-Purpose Cooperative.

According to the SEC, these conduit firms have interlocking stockholders, directors and officers who are connected in one way or another to the management or operation of Multitel.

The SEC last month filed a criminal complaint against Saturnino and Rosario Baladjay, owners of Multitel. If convicted, Baladjay faces a prison term of seven to 21 years.

This case is apart from the individual estafa cases that hundreds of investors filed against Baladjays.

The SEC is encouraging other aggrieved investors of Multitel to come out in the open and file complaints with the regular courts to build its case against the Baladjays.

The Makati Prosecutors’ Office is now conducting a preliminary investigation into the case to determine whether the charges leveled by the SEC against the officers of the Multitel Group have basis.

The SEC filed the complaint to ensure the criminal prosecution of erring individuals and to send a strong signal to the public that the corporate watchdog agency will not hesitate to clamp down on any fraudulent activity.

The Multitel Group’s modus operandi is to offer high interest rates of as much 15 percent a month for a six-month placement of P100,000.

The SEC has expressed doubts whether investors of Multitel could still recover their investments from the company due to the repeated failure by management to pay back investors’ claims and the fact that the firm’s owner can no longer be located.

The SEC estimates that the Multitel Group has collected between P20 billion and P25 billion from various individuals all over the country. The group reportedly employs about 600 agents or what they term as counselors. One counselor was said to handle as much as P700 million worth of accounts.