SEC files raps against lending company officers over falsified bank certificates

THE SECURITIES and Exchange Commission (SEC) on Monday filed criminal raps against 153 individuals, including 67 Indian nationals, for violations of the Lending Company Regulation Act (LCRA).

In a statement, SEC Commissioner Emilio B. Aquino said its Enforcement and Investor Protection Department filed criminal complaints at the Pasay City Prosecutor’s Office against officers, directors, stockholders, agents, and a number of John Does linked with 18 lending firms.

The companies were identified as: 7 Lions Lending Management Corp., Amsuda Lending Corp.; Bhati and Jogi and Swali Lending and Trading Corp.; Dr. Verma Lending Corp.; Maan & Bhaker Landing, Inc.; Manak Pur Lohara Lending Corp.; Paramjit Harvinder Gold Lending, Inc.; Purewal and Rashpal Lending, Inc.; Divya and Kavita Lending Corporation; Satguru Lending Corporation; Sartaj Lending, Inc.; All In 7000 Lending and Trading Corp.; Balak1008 Lending and Trading, Inc.; Star 77777 Lending and Trading, Inc.; Chardikla 786 Lending and Trading, Inc.; Naurasidhu55 Lending and Trading Corporation; Phil 86 Gurunanak Lending and Trading Corp.; and X-Ceee86 Lending and Trading, Inc.

The corporate regulator found the 18 firms violated Section 5 of the LCRA, or Republic Act No. 9474, which states that lending companies applying for a Certificate of Authority (CA) to operate from the SEC must deposit a minimum paid-in capital of P1 million. Applicants must then secure a notarized bank certificate as proof of the deposit.

Upon checking, the SEC discovered the identified lending firms had submitted fake bank certificates that were “not issued by the bank at all.”

“Representatives from the subject bank, in a letter to the SEC, categorically denied having issued the submitted bank certificates. It verified that the account numbers indicated in the bank deposit certificates were not issued by the subject bank since they use a different bank code,” the SEC said.

This prompted the regulator to also file criminal complaints against the 18 firms for falsification of public and commercial documents under Article 172 of the Revised Penal Code.

“We will prosecute those submitting fake bank certificates. The SEC shall be the complainant. For sure the SEC was indeed misled by the bank certificates as proof of paid in capital,” Mr. Aquino was quoted as saying in a statement.

The SEC further said that it plans to blacklist all company service providers involved in the submission of the fake documents.

The regulator also intends to revoke the Certificates of Incorporation of lending firms found to have submitted false documents but have already received their CAs. “Further, they shall face the possibility of a perpetual ban from ever establishing a lending company again,” the SEC said.

Under the LCRA, lending company officers or employees found to have willingly made any false statement may face a fine of between P10,000 and P50,000, or imprisonment of not less than six months but not more than 10 years, or both, at the discretion of the court. —