SEC sets probe of Tibayan Group over sale of securities

The Securities and Exchange Commission is investigating the Tibayan Group Asset Management Corp. (TGAMC) for fraudulent sale of securities to the public in violation of the Securities Regulation Code (SRC).

TGAMC, the mutual fund firm of the Tibayan Group, is suspected of engaging in the operations of a pseudo-investment firm as it offers three to five percent interest a month as a come-on to potential investors.

"We’re looking into the operations of the Tibayan Group. We have received lots of queries from the public about the group-whether the company’s solicitation of investments is legal or not," an SEC official said.

The SEC official, who requested anonymity, said that under the law, a mutual fund firm cannot promise a rate of return on investments.

The same official added that Tibayan may have also violated a provision of the Investment Company Act that requires a mutual fund firm to sell its shares at their net asset value per share. The Tibayan Group was found to have been offering its shares at par value or P100 a piece, giving investors an automatic P8 discount for every share bought.

TGAMC was also found to have failed to comply with a rule that requires all mutual fund firms to publish their daily net asset value per share in at least two newspapers of general circulation.

The NAVPS is calculated daily and is determined by dividing the total value of the fund’s assets less its liabilities by the total number of shares outstanding.

The SEC last week directed the Tibayan Group to explain why it should not be held liable for violation of several provisions of the ICA and securities rules.

The investigation is still ongoing and the SEC expects to come out with its results soon to apprise investors of the legality of operations of the Tibayan Group.

The SEC official did not say how many people had already invested in the company but added that nobody has so far filed a complaint against the firm. The Tibayan Group reportedly has nearly a hundred companies.

The official added that it wasn’t clear as to where Tibayan was investing its money. – Zinnia dela Peña