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Manila Bulletin devider Business devider SEC revokes registrations of Procap, Ray International

SEC revokes registrations of Procap, Ray International

Published Aug 27, 2024 01:41 am

The Securities and Exchange Commission (SEC) has revoked the corporate franchises of Procap International and Ray International Philippines Corporation for illegally soliciting investments from the public.

In a statement, the SEC said its Enforcement and Investor Protection Department (EIPD) cancelled the certificate of incorporation of Procap for violating Section 44 of the Revised Corporation Code of the Philippines (RCC) in relation to Section 6 (i), paragraph 2 of Presidential Decree (PD) No. 902-A.

Procap International, its president and nominees, were directed to pay P1 million, in accordance with administrative sanctions under Republic Act No. 8799, or the Securities Regulation Code (SRC).

The EIPD also issued a revocation order against Ray International Philippines Corporation, for its violation of Section 6(i), paragraph 2 and Section 3 of PD 902-A.

The RCC prohibits corporations from possessing or exercising corporate powers other than those conferred by the law or by its articles of incorporation (AOI).

Meanwhile, PD 902-A authorizes the Commission to suspend or revoke the franchise or certificate of registration of corporations for serious misrepresentation as to what it can do to the prejudice of or damage to the public.

Under Procap’s AOI, the company is expressly prohibited from soliciting investments from the public and issuing investment contracts.

However, the EIPD found the company to be selling securities in the form of investment contracts through policy plans, promising investors 0.2 percent up to 1.4 percent guaranteed daily income depending on their chosen policy.

Section 8 of the SRC states that securities shall not be sold or offered for distribution without a registration statement approved by the SEC.

The EIPD also noted that Procap’s operation has the characteristics of a Ponzi scheme wherein the earnings of early investors are funded using the investments of new investors.

In October last year, the SEC, along with other law enforcement agencies, conducted an entrapment operation against Procap during an event it organized in a hotel in Makati City due to its illegal investment solicitation activities. This led to the arrest of 20 individuals including its directors, incorporators, agents and employees.

The Commission subsequently issued a cease and desist order (CDO) against the company in February this year.

Ray International, which does business under the names and styles of Ray Education Directions Consultancy Services, Be Unrivaled Productions and Sine Cordillera, was likewise found to be soliciting investments without approval from the Commission.

The company was found to be offering programs for becoming a real estate agent, and a property saver or buyer-investor with a promise of guaranteed income of up to P61,000 for 24 months, depending on the investment.

It also promotes becoming a passive investor as a partner-financier for an investment ranging from P300,000 to P10 million, with a total income of P108,000 up to P3.6 million in 12 months.

The Commission on June 8, 2023 also issued a CDO against Ray International, along with other companies such as Casa Infini Builders and Realty Co. Ltd., Casa Infini Realty Management Co., Ltd., and Casa Infini Properties and Development Corp., where its incorporator also holds controlling positions.

Related Tags

Securities and Exchange Commission Procap International Ray International Philippines Corporation
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