Even as the CDO on Multitel remains in force, the SEC has been receiving persistent reports that Multitel continues to accept investments from the public through conduit entities Everflow, Oneheart Multi-Purpose Cooperative and Star Enterprise Multi-Purpose Cooperative. Not one among the four firms is a registered securities broker or dealer.
To warn the public against unauthorized solicitation of investments, the SEC reiterated that the CDO issued against these firms since January this year has never been lifted and remains in force. The CDO was issued on the basis of findings that Multitel and others had been offering investment contracts without prior registration with the SEC.
The SEC has likewise issued a CDO against Multitel International Holdings Inc. (MIHI), another company being used by Multitel to continue its illegal sale of securities to the public. Most of Multitel’s placements and accounts were transferred to MIHI, SEC said.
"Everflow, Oneheart and Star, by allowing themselves to be used as MIHI’s marketing institutions… became willing instruments for the circumvention of the commission’s CDO against Multitel. They have thus defied the same CDO that also operates against them as conduits and in the process made themselves liable for contempt…," the commission en banc said in an order released late Friday.
MIHI and Multitel are both owned by Saturnino and Rosario Baladjay. MIHI is registered as a holding company while Everflow is a management consultancy company owned by Felix and Iris Aquino.
According to the SEC, MIHI, Everflow, Oneheart and Star have interlocking stockholders, directors and officers who are connected in one way or another to the management or operation of Multitel.
The modus operandi of these firms is to attract investors by offering as much as 15 percent guaranteed monthly interest for a minimum investment of P10,000 or "double-your-money" rate in case the investor opts to avail himself of the 18-month lock-in investment scheme.
SEC said MIHI, Everflow, Oneheart and Star have deceived the investing public by representing to their respective investors that they are legally authorized to solicit investments from the public and to enter into investment contracts, despite knowing fully well that the securities they offer are unregistered.
"The legal requirement to register with the commission any sale or distribution of securities within the Philippines is premised on the need to prevent fraud on investors or grave or irreparable injury or prejudice to the investing public," SEC said.
SEC said the rigidity of securities registration requirements is intended to ensure full disclosure and to provide accurate information to investors.
To prevent the group from defrauding more investors, the SEC is considering revoking the respective corporate licenses of Multitel and its alleged conduit entities.
Other companies said to be used by Multitel in soliciting investments from the public and are covered by the CDO earlier issued by the SEC are Partners in Progress Holdings Inc., Sage Management Corp., CUP Multi-Purpose Cooperative Inc., Multilink Multi-Purpose Cooperative Inc., Oceanic Employees, Bethel Multi-Purpose Cooperative, Goodwill Development Cooperative, and Handog sa Pag-unlad Multi-Purpose Cooperative.
The investment scheme employed by these companies has been gaining popularity as an alternative source of income for thousands and thousands of Filipinos seeking to improve their plight.