This as the corporate regulator scheduled a hearing today for Glasgow officials to present their side on the issue which landed prominently in the headlines due to the involvement of a large number of military and police personnel, some of whom are ranking officers and retired officials as well.
Glasgow has denied that it is connected with ICS, the first firm tagged in the scam, but the former was the subject of an SEC-issued cease-and-desist order (CDO) last Friday.
Glasgow’s incorporators – Radicion Baldia, Jenilyn Condes, Jonathan Condes, Roldan Estacio and Manuel Roldan Jr. – do not match any of the ICS founders – Mirasol Aguilar, Emilia Sison, William Sison, Ireneo Sison Jr. and Mimosa Samodea – but sources said this is a common ploy companies use to avoid tracing their links with each other. All corporate information documents such as articles of incorporation and by-laws can be readily accessed at the SEC by the public.
The SEC issued the CDO against Glasgow last Friday on complaints it has been selling investment contracts without license and luring clients on "get-rich-quick" schemes by reportedly giving a huge 15-percent monthly interest on six-month money replacements of between P10,000 to P50,000.
Tomas Syquia, director of the SEC’s Compliance and Enforcement Department, said the investigation on Glasgow started over a month ago when an identified concerned citizen wrote the SEC inquiring about Glasgow’s activities. This was later followed by an e-mail message of the same nature, and a formal complaint with documentary evidence, from which he said the SEC was able to build up a case.
Glasgow lawyers have filed with the SEC a motion to lift the July 12 CDO, which stemmed from an earlier freeze order of its bank accounts issued last July 9 by the Anti-Money Laundering Council (AMLC).
In issuing the CDO, the SEC said Glasgow has been operating illegally from the start since it is not authorized or licensed to engage in investment contracts, having been incorporated merely as a credit and collecting company.
Earlier, three government agencies joined forces to investigate the alleged pyramiding activities of ICS Exports and Glasgow Credits.
The Department of Trade and Industry, the Securities and Exchange Commission and the Bangko Sentral ng Pilipinas agreed to jointly conduct the investigation.
The three agencies are meeting today to outline their individual jurisdiction and to finalize a draft administrative order (DAO) which would impose tougher laws against pyramiding and other financial scams.
Pyramiding involves the recruitment of agents upon which the recruiter earns a commission even though there is no underlying product being sold.
The SEC had already issued a cease-and-desist-order against Glasgow Credit, while the BSP had issued a freeze order on the activities of both Glasgow and ICS for their alleged pyramiding activities.
The BSP also issued a warning to the public against investing in companies which offer exceptionally high returns on their investment.
Glasgow Credit reportedly offered a 15-percent return on a minimum investment of P50,000.
Investors were attracted to the offer, expecting an interest income of P7,500 a month on a minimum income of P50,000.
BSP investigation showed that Glasgow Credit appeared to be engaging in pseudo-deposit-taking activities. Only banks are licensed by the BSP to accept deposits.
ICS, on the other hand, allegedly sold investment contracts.
According to the motion, Glasgow said that its funds come from legitimate and independently—verifiable sources, and are being used for legitimate business purposes. As a duly-registered corporation, Glasgow said the firm is engaged in borrowing funds from various creditors for a stipulated interest that is payable within six months.
In the same motion, the credit and collection company explained that the contracts it executed with its creditors are not securities but loan documents that do not assume the nature of an investment.
Glasgow was earlier tagged in media reports as one of the companies that allegedly victimized investors due to a get-rich-quick scheme most commonly known as pyramiding. In the news items, GCCSI was erroneously reported as having been padlocked by the National Bureau of Investigation, and its officers had supposedly run away with their client’s money.
This however, was vehemently denied by Glasgow. According to its corporate affairs vice president, Jocip Sarmiento, the company was never padlocked nor did its creditors – many of them reportedly soldiers and policemen – go to its office to demand for the return of their money.
"Our creditors are confident that their money is intact and is under safekeeping in our depository banks," he pointed out.
Sarmiento reiterated his earlier press statement that Glasgow has sufficient financial and other resources to back up its obligations to its creditors. He also added that contrary to earlier reports, not a single lawsuit has been filed against Glasgow. He stressed that Glasgow has been able to meet all scheduled payments to its creditors until its funds were frozen last July 12, 2002. – Conrado Diaz Jr. and Marianne Go