DOJ probes charges filed by SEC vs MFT Group

A prosecutor has been assigned by the Department of Justice (DOJ) to conduct the preliminary investigation of the criminal complaints filed by the Securities and Exchange Commission (SEC) against the owners and officers of Maria Francesca Tan (MFT) Group of Companies, Inc. and Foundry Ventures I, Inc. for alleged illegal investment activities.

Prosecutor General Benedicto Malcontento yesterday said that a prosecutor has been assigned to the case that was received by the DOJ last 15 April. 

The prosecutor though has yet to issue a subpoena to the parties that would require them to appear at the DOJ for the start of the hearings. 

Criminal complaints were filed by the SEC with the DOJ against MFT and Foundry Ventures for violating Sections 8, 26, and 28 of Republic Act (RA) 8799, the Securities Regulations Code (SRC), in relation to Section 6 of RA 10175, the Cybercrime Prevention Act of 2012.

The MFT Group of Companies and Foundry Venture was accused of violations of Section 54.1(c), in relation to Section 54.2 of the SRC, Section 177 of RA 11232, the Revised Corporation Code (RCC), and SRC Rule 68, in connection with material misrepresentations in their audited financial statements.

The DOJ was told that the criminal charges stemmed from complaints submitted by several investors who participated in the investment scheme of the MFT Group which later transitioned to Foundry Ventures.

It averred that the MFT Group allegedly promised Guaranteed returns ranging from 12 percent to 18 percent of the amount they invested which was considered as interest income.

The scheme, according to SEC, was perpetuated through the issuance of post-dated checks reflecting one percent to 1.5 percent monthly interest to interested investors who were given either a promissory note or borrower-lender agreement as proof of their investment.

The SEC said under Section 8 of the SRC, "securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC."

Also, Section 26.3 of the SRC states that it is "unlawful for any person, directly or indirectly, in connection with the purchase or sale of any securities, to engage in any act, transaction, practice, or course of business which operates or would operate as a fraud or deceit upon any person."

Section 28 of SRC provides that "no person shall engage in the business of buying or selling securities in the country as a broker or dealer, or act as a salesman or an associated person of any broker or dealer unless registered as such with the Commission."

The SEC in its DOJ complaints, said that the MFT Group of Companies and its officers and directors were also liable for 17 counts of misrepresentations in its 2018 to 2021 audited financial statements (AFS) by reflecting dividend income which has no basis.

Named as respondents were Maria Francesca Tan, Eduardo Tan, Florita Tan, Enrique Eduardo Tan, Charles Edward Tan, Christian Konstantin Agbayani, Maria dela Funete, Philip Tan, Jenna Fuentes, Ronaldo Nery, Halmond Parker Ong, Chiqui Tan, Jose Donnie Montelibano, Romarico Ruiz, Arlene Navarro, Maria Beatriz Dolores Tomas, Mary Ruth Oquendo, Joanne Cabaero, Thuy Nguyen, Roxanne Agbayani, Luis Gabriel Cancio Jr., Noel Olan, Joselito Hernandez Jr., Christian Olan, Tito Cosejo Jr. Christian De Vera, Jose Carlos Cancio, Mae Tan, Martin Choi, Reanne Po, Marta Gilda Poursabouri, Alan Madlangbayan, Mildred Madlangbayan, Jeruz Madlangbayan, and Rosanna Vidal.

Isla Lipano and Co. was also charged, which served as independent auditor of the MFT Group and Foundry Ventures from 2018 to 2021.

The SEC, earlier had made permanent the cease and desist order (CDO) it issued against MFT Group of Companies and Foundry Ventures I, Inc., along with their officers and agents.

The firm's motion to lift the CDO was denied for lack of merit.