The Securities and Exchange Commission (SEC) has revoked the corporate registration of Dual Fuel Petroleum Corp. after finding the company illegally solicited investments from the public through a scheme that regulators likened to a Ponzi operation.

In an order, the corporate regulator also imposed a ₱1 million administrative fine on the company for the unauthorized offering of securities. The firm’s five incorporators were similarly directed to pay an additional ₱1 million fine for their roles in the illicit activity.

Dual Fuel, which was incorporated in 2020, was authorized under its charter to establish and operate gas stations and engage in franchising. However, the SEC Enforcement and Investor Protection Department discovered that the company exceeded its mandate by offering investment contracts to the public without the requisite licenses.

The investigation revealed that Dual Fuel collaborated with Legends Petroleum Corp. to recruit “franchise co-owners.” Under the scheme, individuals were encouraged to invest a minimum of ₱500,000 in exchange for promised quarterly profits over a 20-year period. The company reportedly marketed 280 slots for co-ownership across eight gasoline stations.

The regulator described the business model as fraudulent, noting that the returns promised to investors appeared to be funded by the capital of newer participants rather than legitimate commercial revenue. This structure, the SEC said, mirrors a Ponzi scheme where the sustainability of payouts depends entirely on a continuous influx of new member contributions.

The SEC ruled that Dual Fuel’s investment-taking activities constituted an ultra vires act, or an action beyond the legal powers conferred upon a corporation by its Articles of Incorporation.

By presenting itself as a legitimate investment vehicle, the company engaged in "serious misrepresentation" to the detriment of the investing public, the commission said.

The revocation of the certificate of incorporation was based on violations of Section 44 of the Revised Corporation Code of the Philippines, as well as multiple provisions of the Securities Regulation Code. Specifically, the company violated Section 8.1, which prohibits the sale of securities without an approved registration statement, and Section 28.1, which requires brokers and dealers to be registered with the SEC.

The commission also cited Section 26.1, which outlaws the use of fraudulent schemes in connection with the sale of securities.