Consumers are warned of engaging in business dealings with Procap International and Ray International Philippines Corp. after the Securities and Exchange Commission (SEC) revoked the companies’ corporate registrations due to illegal investment solicitation activities.
In an order dated 7 August, the SEC’s Enforcement and Investor Protection Department (EIPD) canceled Procap International's certificate of incorporation for violating Republic Act 11232, or the Revised Corporation Code of the Philippines.
Procap International, along with its president and nominees, was also ordered to pay a P1 million fine in line with administrative sanctions under Republic Act 8799, or the Securities Regulation Code (SRC).
The EIPD also issued a revocation order against Ray International Philippines for similar violations of Presidential Decree 902-A.
The Revised Corporation Code prohibits corporations from engaging in activities beyond those authorized by law or their articles of incorporation (AOI).
PD 902-A, conversely, gives the SEC authority to revoke corporate franchises or certificates of registration for serious misrepresentation that harms the public.
Procap’s AOI prohibited it from soliciting public investments or issuing investment contracts.
Despite this, the EIPD found that the company had been illegally selling securities in investment contracts through policy plans, promising investors a guaranteed daily income ranging from 0.2 percent to 1.4 percent based on their chosen policy.
The SRC mandates that securities cannot be sold or distributed without a registration statement approved by the SEC.
The EIPD noted that Procap’s operations bore the characteristics of a Ponzi scheme, where returns to earlier investors were paid from the contributions of new investors.
In October 2023, the SEC, in coordination with law enforcement agencies, conducted an entrapment operation during a Procap event in Makati City.
The operation resulted in the arrest of 20 individuals, including the company’s directors, incorporators, agents, and employees. The Commission followed up with a cease and desist order against Procap in February.
Meanwhile, Ray International Philippines, which operates under various business names such as Ray Education Directions Consultancy Services, Be Unrivaled Productions, and Sine Cordillera, was also found to be soliciting investments without SEC approval.
The company offered programs promising guaranteed income for real estate agents, property savers, and passive investors. These schemes advertised returns of up to P61,000 over 24 months for smaller investments and up to P3.6 million within a year for larger investments ranging from P300,000 to P10 million.
To recall, the SEC issued a cease and desist order against Ray International last 8 June, which also covered related companies such as Casa Infini Builders and Realty Co. Ltd., Casa Infini Realty Management Co. Ltd., and Casa Infini Properties and Development Corp., where one of Ray International’s incorporators holds controlling positions.