The Securities and Exchange Commission (SEC) announced the revocation of the corporate registration of Pigdeals International Holdings Inc. for unauthorized investment taking activities resembling a Ponzi scheme.
The SEC Enforcement and Investor Protection Department (EIPD) issued the order after finding that the company has been selling or offering securities to the public without the necessary secondary license from the Commission.
“In doing so, Pigdeals committed an ultra vires act prohibited under Section 44 of Republic Act No. 11232, or the Revised Corporation Code of the Philippines, according to the order,” said the SEC.
The SEC-EIPD added that, “Pigdeals’ activities also constituted serious misrepresentation as to what the corporation can do or is doing, to the great prejudice of or damage to the general public, under Section 6 of Presidential Decree 902-A.”
The SEC had advised the public against dealing with Pigdeals and other similar entities as early as October 15, 2019 through an advisory.
Instead of refuting the advisory, Pigdeals started to wind down its business activities until eventually abandoning its office in Metrowalk, Pasig City in the latter half of 2019.
The EIPD then issued a show cause order against Pigdeals on November 11, 2020, directing the company to explain why its corporate registration should not be revoked.
The order, however, was not served upon Pigdeals’ registered principal office address as it had already been vacated. The supposed addresses of the incorporators were likewise proven to be either non-existent or incorrect.
Pigdeals offered investment packages worth P2,500 each, supposedly to cover the costs of raising and selling one piglet, with a promised net profit of 80 percent or P4,500 after three months.
In the course of its investigation, the EIPD found that Pigdeals did not have the license to operate agricultural lands, animal farms, and ranches, among others, from the Bureau of Animal Industry.
Regardless, Pigdeals’ scheme involved securities, particularly an investment contract, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.
As a form of security, investment contracts must be registered with the SEC before they can be sold or offered within the Philippines, pursuant to Section 8 of Republic Act No. 8799, or the Securities Regulation Code.
Records of the Commission, however, showed that Pigdeals has neither registered any securities nor applied for the necessary license to offer such securities for sale.
“Particularly vile is the deceitful representation of Pigdeals to the public that it has secured a secondary license from the Commission under the name Pigdeals International Holdings Inc. and that its primary license is procured from the Department of Trade and Industry under the name Pigdeals Agriventures Hog Farming Trading,” the EIPD noted.
The EIPD emphasized that Pigdeals’ scheme was “clearly in the nature of a Ponzi scheme where the profits or payouts shall be taken from the incoming investor or additional pay-ins of existing members-investors considering that it does not have any underlying legitimate business from where it could source its promised return on investments to its investors.”