SEC issues cease and desist order against religious corporation KAPA

The Securities and Exchange Commission (SEC) has issued a cease and desist order for independent religious corporation Kapa-Community Ministry International Inc. to stop soliciting investments from the public without the necessary licenses.

In an emailed statement, the SEC said it issued the cease and desist order against KAPA on February 14. The company also operates KAPA Kabus Padatuon (Enrich the Poor), KAPA/ KAPPA (Kabus Padutoon), KAPA-Co Convenience Store and General Merchandise, and KAPA Worldwide Ministry.

The SEC said it found substantial evidence that KAPA has been offering and selling securities in the form of investment contracts without the necessary license.

"The order, which covers the religious firm’s partners, officers, directors, agents, representatives and all other persons acting for and in their behalf, further directed KAPA to cease from promoting its investment scheme through the internet and remove promotional presentations online," the SEC said.

"The SEC also barred KAPA, its affiliates and subsidiaries, including its directors and officers, representatives and the persons acting for and in their behalf from disposing of their remaining properties and other assets for the benefit of the investors," it added.

According to the SEC, KAPA is a registered corporation in the Philippines, but its certificate explicitly states that it is not authorized to undertake business activities requiring a secondary license.

These activities include acting as a broker or dealer in securities, investment houses, 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, based on the 'Certificate of Membership with Deed of Donation' members received upon joining," the SEC said.

Citing an investigation by the National Bureau of Investigation (NBI) in Caraga, the SEC said data showed that KAPA amassed some P7 million from investors.

The religious firm was said to have mostly targeted teachers in Bislig City in Surigao del Sur, based on complaints received by the SEC Enforcement and Investor Protection Department (EIPD).

Joel A. Apolinario, president and co-founder of KAPA, also a pastor or minister of KAPA, has since been charged with syndicated estafa in relation to the investment scheme, but the case was dismissed for lack of interest of the parties to pursue the complaint.

"The petitioner EIPD adduced sufficient evidence to support its allegations that KAPA is engaged in offering for sale securities to the public through indiscriminate or random offering online via videos promoting its investment scheme to potential investors without prior registration,” read the cease and desist order," the cease and desist order read. —Jon Viktor Cabuenas/KG, GMA News