SEC revokes registration of KAPA over Ponzi scheme

MANILA, Philippines — The Securities and Exchange Commission (SEC) has revoked the registration of Kapa-Community Ministry International Inc. (KAPA).

According to the SEC, KAPA committed “serious misrepresentation on what it can do or is doing to the prejudice and damage of the public.”

In a decision dated April 3, the commission en banc granted the petition of the SEC Enforcement and Investor Protection Department to revoke KAPA’s certificate of incorporation.

EID said KAPA offered and sold securities, in the form of investment contracts and in the guise of donations, without the necessary license and in a manner resembling a Ponzi scheme.

“Kapa in dealing with the public is using its registration with the commission as a religious corporation as a backdrop to solicit investments from the public knowing that it does not have the requisite registration. Such act is indicative of Kapa’s intent to deceive the public on what it can do or is doing to the damage and prejudice of the investing public,” the SEC en banc said in its decision.

SEC said KAPA is prohibited from undertaking business activities requiring a secondary license such as acting as broker or dealer in securities, investment house and close-end or open-end investment company.

Despite its lack of authority to offer and sell securities, KAPA recruited and encouraged members to donate any amount in exchange for a 30 percent monthly return for life, without having to do anything other than invest and wait for the payout.

Such scheme constituted the sale and offer of securities, in the form of investment contracts, and required a secondary license from the SEC.

“Kapa misrepresents itself to the public by concealing this investment scheme in the guise of a donation to entice the public to ‘donating’ when in truth and in fact they are investing,” it said.

Last Feb. 14, the SEC already issued a cease and desist order against KAPA. The order was made permanent  after KAPA failed to file a motion for the lifting thereof within the prescribed period.

The order covered the partners, officers, directors, agents, representatives and all other persons acting for and on behalf of KAPA.

The entity also operates and is known by other names such as KAPA Kabus Padatuon (Enrich the Poor), KAPA/ KAPPA (Kabus Padutoon), KAPA-Co Convenience Store and General Merchandise and KAPA Worldwide Ministry.

SEC reiterated  its advice for the public to be cautious in dealing with KAPA and to report to its head office or extension offices any continued investment-taking activity by KAPA and its allied entities.