Hasmadai barred from soliciting investments

MANILA, Philippines — The Securities and Exchange Commission (SEC) has ordered the Hasmadai Group to permanently stop from conducting unauthorized investment solicitation activities.

In a resolution dated Dec. 3, the commission en banc affirmed the issuance of the cease and desist order against the Hasmadai Group, denying the company’s motion to lift the CDO.

Through the resolution, the SEC made permanent the cease and desist order against Humanitarian and Spiritual Mission Apostulates of Davao and Asia Inc., Hasmadai Foundation Inc. and Humanitarian Institute of Technology Corp. for their unauthorized solicitation of investments.

A CDO against Hasmadai Group was issued by the SEC last May after it found the group to be soliciting investments from the public through several branches in the CARAGA Region without the necessary license from the commission.

According to the SEC, the group’s scheme revolved around the solicitation of donations ranging from P5,000 to P20,000, with the donor guaranteed to get a monthly missionary allowance equivalent to 27 percent to 34 percent of the donation.

“The scheme involved the sale and/or offer of securities in the form of investment contracts, whereby a person makes an investment of money, in a common enterprise, with the expectation of profits, to be derived solely from the efforts of others,” the commission said.

The SEC said that Hasmadai in its motion to lift maintained that the amounts received by the corporation are donations and not investments.

As such, it claimed that these could not be considered as securities under the contemplation of the Securities Regulation Code (SRC).

The SRC states that securities are not allowed to be sold or offered for sale or distribution within the Philippines without a registration statement duly filed with and approved by the commission.

The SEC said that the Hasmadai Group also argued that it is a religious organization whose operations are supported by the donations it receives from willing donors, both locally and abroad, and from the profits generated by its shopping centers.

However, the commission en banc dismissed the Hasmadai Group’s arguments and ruled that its members are not donating out of gratuity, but because of the promised missionary allowance ranging from 27 percent to 34 percent that they will receive.

“The use of the term donation by Hasmadai does not operate to negate the fact that the unauthorized investment scheme which it is carrying out consists of selling/offering unregistered securities in the form of investment contract,” the commission en banc said.