ARTA thumbs down Lyka’s registration

MANILA, Philippines — The Anti-Red Tape Authority (ARTA) has rejected the request filed by Lyka Philippines Solutions Inc. for the automatic approval of its application for company registration with the Securities and Exchange Commission (SEC).

Lyka Philippines is behind the popular social media app Lyka which offers so-called Lyka Gems tokens.

The SEC received the notice from ARTA, which denied Lyka’s request for automatic approval of its application for registration with the SEC over the company’s failure to submit the complete documentary requirements.

Lyka president Michael Bryant Lim filed the request before the ARTA after noting that the SEC supposedly failed to act on its application for company registration, despite the submission of its articles of incorporation, by-laws, application to do business, and the corresponding incorporation fee, among others.

The ARTA, however, affirmed the SEC’s position that the automatic approval mandated by law did not apply to Lyka, given that entities under investigation are not covered by the reglementary period provided in the Ease of Doing Business Act, and that automatic approval is only applicable upon submission of complete requirements.

Republic Act 9485, as amended by Republic Act 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, provides that an original application or request for issuance of license, clearance, permit, certification or authorization shall be deemed approved if the concerned government agency fails to approve the same.

Lyka and its major stockholder, Things I Like Co. Ltd. was issued a cease and desist order for violation of Republic Act 11127, or the National Payment Systems Act, and is now suspended for possible money laundering.

The SEC said Lyka failed to comply with a directive from the SEC Enforcement and Investor Protection Department (EIPD) requiring it to submit proof as to how the company finances its operation, list of merchants, list of payables, and a document disclosing the owners of GRL17 Nominee Ltd., which appeared as the founding member of Things I Like Co., Ltd.

Clearance from the EIPD is one of the requirements for businesses engaged in the financial technology sector seeking to register with the SEC.

“However, (Lim) failed to show proof that it submitted a clearance from the (EIPD). Accordingly, it cannot be said that there was submission of complete documentary requirements as stated in the Citizen’s Charter of SEC for Registration of Corporations through eSPARC,” the ARTA said in its resolution denying the request.

“Considering the foregoing, the requirements laid down under Section 10 of RA 9485, as amended, and its Implementing Rules and Regulations for Automatic Approval have not been met. Thus, automatic approval is not warranted in the instant application for registration of a company submitted by Lyka with the SEC,” the ARTA said.