CDO vs HASMADAI permanent — SEC

CDO vs HASMADAI permanent — SEC | Daily Tribune

Corporate regulator Securities and Exchange Commission (SEC) has made permanent the cease and desist order against Humanitarian and Spiritual Mission Apostulates of Davao and Asia Inc., HASMADAI Foundation Inc. and Humanitarian Institute of Technology Corp. for their unauthorized solicitation of investments.

In a resolution dated 3 December, the Commission en banc affirmed the issuance of the CDO against the HASMADAI Group, effectively denying the company’s motion to lift.

The Commission en banc dismissed the HASMADAI Group’s arguments including a claim that its members are placing donations not investments.

Money is being handed not out of gratuity but because of the promised missionary allowance ranging from 27 percent to 34 percent that they will receive, according to SEC.

“The use of the term ‘donation’ by HASMADAI does not operate to negate the fact that the unauthorized investment scheme which it is carrying out consists of selling/offering unregistered securities in the form of investment contract,” the Commission en banc held.

Securities as invest deal

The scheme involved the sale and/or offer of securities in the form of investment contracts, whereby a person makes an investment of money, in a common enterprise, with the expectation of profits, to be derived solely from the efforts of others, the Commission held.

Section 8 of Republic Act 8799, or the Securities Regulation Code (SRC), provides that 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.

In its motion to lift, HASMADAI maintained that the amounts received by the corporation are donations and not investments, and as such, cannot be considered securities under the contemplation of the SRC.

It further argued that it is a religious organization whose operations are supported by the donations it receives from willing donors, both locally and abroad, and from the profits generated by its shopping centers.

The Commission en banc dismissed the HASMADAI Group’s arguments, and ruled that its members are not donating out of gratuity, but because of the promised missionary allowance ranging from 27 percent to 34 percent that they will receive.