SEC Commissioner Kelvin Lee said these companies should have proper business registrations, good reputation, and have been existing for a relatively long time.
“You have to also look at their registration statements, just do your due diligence,” he said in an interview with financial wealth expert and host of Usapang Pera Vince Rapisura.
He said prospective investors should also exercise caution especially on firms promising unrealistic returns on investment.
Lee advised avoiding get-rich-quick schemes in the light of the criminal complaint filed by SEC against Kapa-Community Ministry International Inc. (KAPA) and its officers for perpetrating an alleged investment scam in violation of Republic Act 8799 or the Securities Regulation Code.
The SEC issued a cease and desist order on February 14 and an order of revocation of the non-stock corporation’s registration on April 3.
The Commission found KAPA, a Surigao del Sur-based religious corporation, to have enticed the public to "donate" at least PHP10,000 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 payout.
“There is no way to sustain a scheme like that without getting from the ones below what I think they call the downlines,” Lee explained.
He said investors thus receive returns from recruitment, and not from businesses.
Lee also noted that KAPA has no substantial assets.
The commission also found that KAPA had net excess of only PHP5,000 based on its financial statement in 2017, he added.
“So how will that support the billions (of pesos) that he (founder Joel Apolinario) is supposed to be paying others’ money?,” he said, noting KAPA also recorded net excess of PHP1 million and PHP5 million from the school and allegedly acquired hospital, respectively.
Lee said KAPA also claimed owing other businesses, particularly those registered as single proprietorships that were only operating in 2018 and 2019.
He further said these single proprietorships were not registered under the name of KAPA, but under Reyna Lobitaña Apolinario, the wife of KAPA founder.
“So that also raises a question: If supposedly these are the businesses of KAPA, why they are in the name of the wife?,” he added.