The Securities and Exchange Commission (SEC) continues its crackdown on erring lending and financing companies, revoking the corporate registrations and secondary licenses of 56 companies for failing to comply with reporting requirements.

In an order, the SEC Financing and Lending Companies Department (FinLenD) cancelled the primary registrations and certificates of authority to operate as a lending/financing company of 47 companies, which have been declared delinquent pursuant to Republic Act No. 11232, or the Revised Corporation Code (RCC).

Section 177 of the RCC provides that the Commission may place any corporation under delinquent status if it fails to submit the reportorial requirements three times, consecutively or intermittently, within a period of five years.

Disclosure breaches

The 47 corporations were found to have failed to file their audited financial statements, general information sheets, director or trustee compensation reports, and director or trustee appraisal or performance reports on three separate occasions within five years.

The Commission also issued separate orders on 19 May for the revocation of the corporate registration of nine more companies for continuing noncompliance with their reportorial requirements.

Of these companies, two were found to have failed to comply with SEC Memorandum Circular 28, Series of 2020, which requires the submission of official email account addresses and cellphone numbers for transactions with the Commission.

Meanwhile, the remaining seven failed to submit their business plans as required under SEC Memorandum Circular 3, Series of 2022, or the Implementation of Bangko Sentral ng Pilipinas Circular 1133, Series of 2021 on the Ceiling/s on Interest Rates and other Fees charged by Lending Companies, Financing Companies, and their Online Lending Platforms.

FinLenD noted that the companies failed to observe the directives of the Commission, despite the issuance of show-cause letters and notices of deficiencies informing and directing them to comply and provide proof of compliance with their reportorial requirements.