SEC cracks down on religious firm KAPA Worldwide Ministry

MANILA, Philippines — The Securities and Exchange Commission (SEC) continues its crackdown on investment scams with the issuance of a cease and desist order against an independent religious corporation which has reportedly amassed at least P7 million from hundreds of investors.

The SEC has ordered Kapa-Community Ministry International Inc., which also operates as KAPA Kabus Padatuon (Enrich the Poor), KAPA/ KAPPA (Kabus Padutoon), KAPA-Co Convenience Store and General Merchandise, and KAPA Worldwide Ministry, to stop soliciting investments from the public without the necessary license after finding substantial evidence that it has been offering and selling securities in the form of investment contracts.

The order, which covers the religious firm’s partners, officers, directors, agents, and representatives, further directed KAPA to cease from promoting its investment scheme through the internet and removing promotional presentations online.

The SEC also barred KAPA, its affiliates and subsidiaries, including its directors, officers and representatives, from disposing of their remaining properties and other assets for the benefit of the investors.

“The commission is duty-bound to protect the interest of the investing public. Thus, it is necessary that a cease and desist order be issued to enjoin KAPA from further offering and selling unregistered securities to the public. Otherwise, to allow KAPA to continue soliciting investments and/or selling or offering for sale securities to the public without the necessary license or permit will operate as a fraud on investors or is likely to cause grave or irreparable injury or prejudice to the investing public,” the SEC said.

SEC said KAPA is a registered corporation in the country but its certificate of incorporation dated March 3, 2017 does not authorize it to undertake business activities requiring a secondary license such as acting as broker or dealer in securities, investment house and close-end or open-end investment company.

Despite its lack of authority to offer and sell securities, KAPA recruited and encouraged members to donate any amount in exchange for a 30 percent monthly return, based on the “certificate of membership with deed of donation” members received upon joining.

The religious firm has been targeting mostly teachers in Bislig City, Surigao del Sur, according to complaints received by the SEC.

In October last year, the SEC had advised the public that KAPA is registered as a non-stock corporation and that it does not have a license to solicit investments.

The SEC, however, continued receiving reports about the intensified recruitment and solicitation activities of KAPA through social media.

KAPA’s president and co-founder Joel Apolinario was featured in several videos posted on YouTube and Facebook, discussing the investment scheme and inviting the public to sign up.

Apolinario, the pastor or minister of KAPA, had been charged with syndicated estafa in relation to the investment scheme, but the case was dismissed for lack of interest of the parties to pursue the complaint, the SEC said.