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SEC goes after religious group operating scam

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By Arra B. Francia
Senior Reporter

THE Securities and Exchange Commission (SEC) obtained a freeze order on several bank accounts and assets of Kapa-Community Ministry International, Inc. (KAPA), which it described as operating one of the biggest investment scams in the country.

In a statement issued Monday, the country’s corporate regulator said the Court of Appeals issued the freeze order against KAPA on June 4 based on its petition it filed alongside the Anti-Money Laundering Council (AMLC).

“KAPA is running a scam. Its financials do not show that it has a capability to deliver. We have to put a stop to it, otherwise there will be more victims who will be recruited and bring in money,” SEC Chairperson Emilio B. Aquino said in a press briefing at the SEC headquarters in Pasay City on Monday.

This came after President Rodrigo R. Duterte said on Friday that he wants KAPA and other investment scams shut down.

“There had been numerous complaints with the President. In fact, I too have been receiving complaints about certain people there that may have prompted the President from ordering the closure (of KAPA),” Presidential Spokesperson Salvador S. Panelo said in a separate briefing in Malacañang.




Fraudulent practices are illegal under Republic Act No. 8799, or the Securities Regulation Code.

Incorporated in 2017 as a non-stock corporation and independent religious corporation by a certain Pastor Joel A. Apolinario, the SEC found KAPA to be soliciting investments from the public despite not having the secondary license to do so.

KAPA continued its operations despite being issued with a cease and desist order by the SEC last Feb. 14. The commission also revoked its certificate of registration last April.

“We have been monitoring this group. They’re blaming government for not being able to address housing, economic concerns. So what they’re saying is KAPA is doing them a favor,” Mr. Aquino said.

The group was found to be soliciting investments, anywhere from P10,000 to P2,000,000, in exchange for monthly returns of 30% for life. Mr. Aquino noted this is much higher than the 5.61-6.75% per annum interest one could gain from investing in government securities.

Based on KAPA’s supposed membership of five million and the minimum investment of P10,000, the SEC said the group will have to pay out P15 billion every month or P180 billion for a year. This also indicates that KAPA has taken at least P50 billion worth of investments from the public.

Without new investors coming in, the SEC said KAPA will not be able to last more than three months.

The SEC emphasized that such scheme is unsustainable, as it will eventually run out of investors and fail to pay out everyone. It also noted that based on its financial information filed October 2018, KAPA’s assets only stood at P465,000.

The company’s alleged sources of revenues were also found to be newly-incorporated firms which Mr. Aquino said do not have the capacity to generate earnings that could sustain the payout.

With its assets frozen, KAPA will no longer be able to give investors the returns they were promised. The SEC said investors may file a class suit against the group to recover their investments.

Mr. Aquino said they are in the process of filing criminal charges against KAPA and its officials, but declined to specify what the charges will be.

In a separate briefing, Philippine National Police Chief General Oscar D. Albayalde said they are already building up the case against KAPA.

Itong linggong ito, we’ll see kung ano maging police operations natin (This week, we will see what police operations will be conducted). Because we’ve been building up cases against them already,” Mr. Albayalde said. — with reports from Arjay L. Balinbin and Vince Angelo C. Ferreras