SEC raises red flag on revival of KAPA
Iris Gonzales (The Philippine Star) - September 16, 2019 - 12:00am

MANILA, Philippines — The Securities and Exchange Commission (SEC), the corporate regulator, has raised the red flag on the supposed revival of the Kapa-Community Ministry International (KAPA).

KAPA is one of the biggest investment scams in recent years, SEC chairman Emilio Aquino said.

Thus, the SEC said it is alarmed over various posts on social media saying that KAPA would soon relaunch its operations under the name KAPA Worldwide Ministry Association.

KAPA Worldwide Ministry Association is not registered either as a corporation or as a partnership and no secondary license to solicit investments from the public was issued under such name, the SEC said.

“KAPA could have not successfully registered another corporation, given its history of defrauding investors and a pending criminal complaint against it and its officers and promoters. KAPA was formerly registered as a nonstock corporation.”

On April 3, the SEC revoked the certificate of incorporation of KAPA for “serious misrepresentation of what it was doing or could do to the great damage or prejudice of the public.”

On June 18, the SEC also filed a criminal complaint against KAPA, its founder and president Joel Apolinario, trustee Margie Danao, corporate secretary Reyna Apolinario and other promoters of the investment scam.

KAPA was found to have solicited investments from the public without securing a secondary license and in a manner resembling a Ponzi scheme.

“Under its scheme, KAPA enticed the public to “donate” money in exchange for a 30 percent monthly ‘blessing’ or ‘love gift’ for life, without having to do anything other than invest and wait for the guaranteed return,” the SEC said in its advisory.

Aquino said KAPA’s investment model was not sustainable.

Section 8 of Republic Act 8799, or the Securities Regulation Code (SRC), provides that “securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission.”

Furthermore, the SEC said Section 26 of the SRC prohibits fraudulent transactions, including Ponzi schemes where investors are lured with impossibly high returns and paid using the money contributed by other investors.

Section 28 further states that no person shall engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered with the SEC.

Thus, the SEC warned anew against KAPA and those involved in enticing investors to the ministry.

“Those acting as salesman, broker or agent may be prosecuted and held criminally liable. They may also face a maximum fine of P5 million or imprisonment of 21 years or both, pursuant to Section 73 of the SRC,” the SEC said.

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