Powerhomes given until Aug 27 to appeal CA ruling

The Securities and Exchange Commission (SEC) will close down the operations of Powerhomes Unlimited Corp. by Thursday next week unless the firm appeals a court ruling upholding the cease-and-desist order earlier issued against it by the SEC.

Tomas Syquia, head of the SEC’s Compliance and Surveillance Department, said Powerhomes has until Aug. 27 to file a motion for reconsideration with the Court of Appeals. "If they do not file, on the 28th we have to close them down," he said.

Powerhomes director Benjie R. Lagman, however, said the firm’s legal counsel is now preparing its motion for reconsideration and expects to file it before the Aug. 27 deadline.

Reassuring its investors, Lagman said the CA decision is not final and executory and with its appeal, Powerhomes will still be allowed to continue marketing real properties and directly sell the "Pabahay Program" that will enable its over 100,000 marketing and real estate sales associates to own their dream houses.

"It’s still business as usual for Powerhomes," Lagman said, adding that the CA decision was just part of a normal process businesses undergo in order to clarify the real issues surrounding the operations of said business.

Lagman pointed out that Powerhomes has even been awarded an outstanding networking company by the Asia Pacific Awards Council in Ateneo de Manila University last May and the National Quality Consumers Awards at the University of the Philippines last month.

In a July 31 decision, the CA’s First Division led by Associate Justice Eloy Bello Jr. denied Powerhomes’ petition to reverse the CDO for lack of merit.

The CDO was issued by the SEC in Jan. 2001 for the unauthorized sale of securities, specifically investment contracts.

Under Powerhomes’ sales scheme, members are given the opportunity to own real estate such as a house and lot package in exchange for $234 in enrollment fee. With the enrollment fee, the investor now becomes a business center owner (BCO).

Upon enrollment and completion of training, the BCO is awarded his/her own business center in the form of an Internet website wherein he can recruit other members for a fixed income.

The CA said the marketing strategy of Powerhomes proved that there is an absence of a product and that it mainly derives its profits through recruitment or from the efforts of others.