SEC to sue KAPA over al­leged scam

Sun.Star Cagayan de Oro - - Business -

MANILA -- The Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) on Mon­day said it in­tends to file crim­i­nal charges against Kapa-Com­mu­nity Min­istry In­ter­na­tional, Inc. (KAPA) and its of­fi­cials for op­er­at­ing an al­leged fraud­u­lent scheme which it con­sid­ers as the big­gest in­vest­ment scam ever seen in the coun­try.

This, af­ter the Court of Ap­peals is­sued a freeze or­der last June 4 on sev­eral banks ac­counts and other as­sets linked to KAPA upon the pe­ti­tion of the SEC and the Anti-Money Laun­der­ing Coun­cil (AMLC).

“In fact, we al­ready re­voked the cer­tifi­cate of reg­is­tra­tion of Kapa Min­istry and we in­tend to pur­sue crim­i­nal charges against all the of­fi­cers and also those who are help­ing and de­fend­ing them,” SEC Chair­per­son Emilio Aquino said in a press brief­ing.

Aquino said SEC is­sued an or­der of re­vo­ca­tion of cor­po­rate reg­is­tra­tion against KAPA last April, and a cease and de­sist or­der last Fe­bru­ary.

“There is no such thing as Kapa Min­istry In­ter­na­tional now ex­ist­ing as far as the SEC is con­cerned. It has al­ready been re­voked for vi­o­la­tions of the Se­cu­ri­ties Reg­u­la­tion Code and the Re­vised Cor­po­ra­tion Code. So, if they in­tend to con­tinue on the busi­ness of Kapa Min­istry In­ter­na­tional, there is no longer any le­gal ba­sis for do­ing so,” he said.

KAPA was found to have re­cruited and en­cour­aged mem­bers to “do­nate” any amount in ex­change for a 30-per­cent monthly re­turn for life, with­out hav­ing to do any­thing other than in­vest and wait for the payout.

Aquino con­sid­ered the 30 per­cent an “un­re­al­is­tic” re­turn of in­vest­ments and “math­e­mat­i­cally un­sus­tain­able.”

He ex­plained that with five mil­lion mem­bers at a min­i­mum in­vest­ment of PHP10,000, KAPA would have pooled funds of PHP50 bil­lion. With monthly re­turn of 30 per­cent, its payout would reach PHP15 bil­lion a month, or PHP180 bil­lion a year.

With­out re­cruit­ing new mem­bers or so­lic­it­ing more in­vest­ments from the pub­lic, the pooled funds would have been di­min­ished by the third month, he added.

“KAPA is run­ning a scam. The fi­nan­cials do not show that it has the ca­pa­bil­ity to de­liver ex­cept to rely on new in­vestors to bring in their money. And we have to put a stop to it oth­er­wise, there will be more vic­tims who will be re­cruited and then bring­ing in their money and ul­ti­mately, it will col­lapse,” Aquino said.

Such scheme con­sti­tuted the sale and of­fer of se­cu­ri­ties, in the form of in­vest­ment con­tracts, and re­quired a sec­ondary

li­cense, ac­cord­ing to the SEC.

Un­der Sec­tion 8 of the Se­cu­ri­ties Reg­u­la­tion Code, se­cu­ri­ties shall not be sold or of­fered for sale or dis­tri­bu­tion with­out a reg­is­tra­tion state­ment duly filed and ap­proved by the Com­mis­sion.

Aquino also pointed out that do­na­tions have no re­turns.

“That’s ex­actly why we are say­ing, hindi kayo pwede bastabasta ku­muha ng (you can­not just get) in­vest­ment from the pub­lic even if you call it as a do­na­tion with­out hav­ing it reg­is­tered first with the SEC. Be­cause what we will do is eval­u­ate the vi­a­bil­ity of the busi­ness,” he added.

Pres­i­dent Ro­drigo Duterte has or­dered the clo­sure of in­vest­ment firms, in­clud­ing KAPA, that of­fer im­pos­si­bly high re­turns.

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