The Securities and Exchange Commission (SEC) has has filed criminal complaint against Suncash Lending Investors Corp., UCash Lending Investors Corp., Suncredit.ph Finance Corp., and ECredit Finance Inc. for operating unregistered online lending platforms (OLPs).

The SEC Enforcement and Investor Protection Department (EIPD) filed the criminal complaint against Suncash, UCash, Suncredit and Ecredit before the Department of Justice (DOJ) last December 20.

The firms’ failure to disclose their online lending applications (OLA) is in violation of the Lending Company Regulation Act (LCRA) and the Financing Company Act (FCA).

The Commission implicated Qi Lu, the president of Ecredit, Suncash, and Suncredit, who was also found to be the beneficial owner of Suncash alongside Zhu Junfeng. Junfeng is also a director of the three other companies.

Also implicated in the complaint were other incorporators, directors and officials of the companies, including Chang Yuting, Joyclyn V. Pelayo, Chang Tao, Bryan Dordas Pelayo, Jasmin Tabjan Vianzon, Jayson Lee, Meng Jie, Xiaofang Song, Danilo Felicilda, Roger Publico, Yaping Liu, Xianming Tian, Shiling Xu, Xiaobo Pan, Sheila Pagkalinawan, and Xiaojing Luo.

The EIPD, together with the Philippine National Police Anti-Cybercrime Group (PNP-ACG), Eastern District Anti-Cybercrime Team, Manila Police District, and the Special Weapons and Tactics Philippines (SWAT), previously implemented a warrant to search, seize, and examine computer against Suncash, as part of the SECs crackdown against unregistered lenders.

The Makati Regional Trial Court Branch 147 issued the search warrant against Suncash upon several complaints received by the PNP-ACG and the SEC against the company.

During the implementation of the search warrant, it was discovered that other lending companies, including Ucash, Suncredit, and Ecredit, had been operating alongside Suncash in its headquarters in Sampaloc, Manila.

The joint operation resulted in the arrest of 83 individuals, identified as operators, managers, employees, and agents of Suncash.

The Commission found that Suncash operated unregistered online lending platforms (OLPs), defying Sections 12(2)(a) 12(3)(a) of the LCRA, in relation to SEC Memorandum Circular No. 19, Series of 2019 (SEC MC 19), providing the Disclosure Requirements on Advertisements of Financing Companies and Lending Companies and Reporting of Online Lending Platforms.

SEC MC 19 requires lending and financing companies to report all their existing OLPs to the Commission.

Records show that Suncash had been operating three unregistered OLPs, namely Suncash, Flashloan, and Peso Pautang, contrary to what is stated in its affidavit of compliance that it operated no other OLP than Suncash.

The EIPD also said that Suncash operated the unregistered OLPs to circumvent and defy the moratorium imposed on the registration of new OLPs effective November 5, 2021, as per SEC Memorandum Circular No. 10, Series of 2021.

Meanwhile, Ucash filed an affidavit for the operation of its OLP on December 7, 2022, when the moratorium on new OLPs was still in effect.

Further, the EIPD charged Suncredit and Ecredit for violation of Sections 14(1)(a) and 14(2)(a) of the FCA, in relation to SEC MC 19. Suncredit and Ecredit were found to be the operators of Peso Pautang and Flashloan, respectively.

The Commission also noted that all the companies engaged in abusive, unethical, and unfair debt collection practices, in violation of SEC Memorandum Circular No. 18, Series of 2019, or the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.

“We are therefore executing this Complaint-Affidavit to attest to the truth of the foregoing, to serve as basis for the finding of probable cause against Respondents for violations of Section 12 (2)(a), (3)(a) of the and Section 1(a) and 2(a) of the and other crimes as the Honorable Prosecutor may determine on the basis of the above-cited facts,” the complaint read.