MANILA, Philippines — The Securities and Exchange Commission (SEC) is conducting a special audit on Seedin Technology Inc. (Seedin) after the crowdfunding entity raised the alarm on a possible fraud committed by its former president Edison Tsai.
“MSRD is conducting a special audit of Seedin which is intended to determine if there is any wrongdoing done and as needed, to also determine if we shall pursue enforcement actions,” SEC commissioner Kelvin Lee told The STAR yesterday.
Seedin, a fintech company duly licensed by the SEC, said that Tsai is involved in a possible fraudulent act which leaves a dark cloud on the newly regularized crowdfunding industry.
The SEC has touted crowdfunding as another way of raising capital.
Asked how much is being audited, Lee said the SEC has yet to disclose the official figures although Seedin’s platform has raised a total of P1.42 billion for 296 projects as of Dec. 2022.
Seedin is licensed by the SEC to act as an intermediary and to operate a crowdfunding portal, providing the country’s small, medium and emerging enterprises (SME) with more funding options.
The company itself is conducting a forensic audit to determine the extent of the fraud committed by Tsai and is preparing to prosecute the erring former president of the company.
“Rest assured that Seedin is doing everything necessary to uncover the fraud committed by Mr. Tsai and to recover any amount which may have been misused by Mr. Tsai,” it said in a statement.
Crowdfunding is a fundraising activity typically conducted by startups and SMEs, where the public can support or fund a business idea through an online platform.
Aside from Seedin, other SEC-registered crowdfunding platforms are Investree Philippine and Eastern Securities Development Corp. (Round One).
As of December 2022, over 200 businesses have successfully raised capital through the platforms of Investree and Seedin from a total of more than 1,000 registered issuers.
Among the MSMEs that have raised capital through crowdfunding is CrymtonComtech Sales & Services.