THE SECURITIES and Exchange Commission (SEC) has barred independent religious firm Kapa-Community Ministry Internationals, Inc. from soliciting investments from the public, since it does not have the necessary license.
In a statement issued Monday, the country’s corporate regulator said it has issued on Feb. 14 a cease and desist order against KAPA, which also operates under the names KAPA Kabus Padatuon (Enrich the Poor), KAPA/ KAPPA, KAPA-Co Convenience Store and General Merchandise, and KAPA Worldwide Ministry.
“It is necessary that a cease and desist order be issued to enjoin KAPA from further offering and selling unregistered securities to the public,” the SEC said.
“Otherwise, to allow KAPA to continue soliciting investments and/or selling or offering for sale securities to the public without the necessary license or permit will operate as a fraud on investors or is likely to cause grave or irreparable injury or prejudice to the investing public.”
The cease and desist order covers KAPA’s partners, officers, directors and officers, representatives, and other persons acting for and in behalf of the organization. The company was also told to remove its promotional presentations and videos posted online.
The commission found that KAPA has been recruiting and encouraging members to donate any amount to the organization in exchange for a 30% monthly return. The members were then given a “Certificate of Membership with Deed of Donation” upon joining.
The religious firm was found to have amassed P7 million from hundreds of investors at some point, according to an investigation by the National Bureau of Investigation in Caraga. Complaints filed with the SEC Enforcement and Investor Protection Department showed that the members were mostly teachers in Bislig City, Surigao del Sur.
The SEC likened the method to a Ponzi scheme since it promises an “exorbitant rate of return with little or no risk at all to the investors.”
This is despite having no authority to solicit investments from the public, as this requires having a secondary license to act as a broker or dealer in securities, an investment house, and a close-end or open-end investment company.
The SEC had advised the public against investing in KAPA back in Oct. 3, 2018, noting that it does not have a license to solicit investments. Following the advisory, the commission received several reports about the group’s intensified recruitment efforts, including videos on Youtube and Facebook featuring KAPA President and Co-founder Joel A. Apolinario.
Mr. Apolinario was later charged with syndicated estafa due to his involvement in the investment scheme, although his case was dismissed for lack of interested parties to pursue the complaint. — Arra B. Francia