The Securities and Exchange Commission (SEC) has secured its fifth legal victory in an ongoing crackdown on predatory lending, after a regional trial court convicted the incorporators and directors of another lending company for submitting falsified documents for its registration.
The SEC said that in a decision dated 8 February, the Pasay City Regional Trial Court Branch 111 found Danica E. Gerero, Imelda C. Singh, Diven E. Gerero, Jasvir Singh and Jaswant Singh guilty beyond reasonable doubt for violating Republic Act (RA) 9474, or the Lending Company Regulation Act of 2007 (LCRA).
It said that the court sentenced each of the respondents, who formed Naurasidhu55 Lending and Trading Corp. as incorporators and directors, to pay a fine of P10,000.
The SEC filed the criminal complaint against the respondents upon finding irregularities in their application for the registration of Naurasidhu55 as a stock corporation, as mandated by the LCRA.
Naurasidhu55 submitted a certificate of bank deposit in the amount of P1 million, purportedly issued by BDO-Two Shopping Center branch in Pasay City, to comply with the minimum paid-up capital prescribed by the LCRA.
However, upon verifying with the bank, the SEC found that no such certificate was issued to Naurasidhu55 and no account existed under the name of Imelda Singh and number stated in the certificate.
According to the SEC, section 12, paragraph 3(a) of the LCRA penalizes with a fine ranging from P10,000 to P50,000 or imprisonment of not less than six months but not more than 10 years or both, any officer, employee or agent of a lending company who shall knowingly and willingly make any statement in any application, report, or document required under the law, which statement is false or misleading with respect to any material fact.
“As clearly provided by RA 9474, any applicant for authority to operate as a lending company, like Naurasidhu55, must have a minimum paid-up capital of One Million pesos,” the court noted.
“However, it was sufficiently established that the statement of Naurasidhu55’s minimum paid-up capital, as contained in the required documents submitted to the SEC, is false, an act punishable under RA 9474.”
Meanwhile, Jasvir Singh, Imelda Singh and Gerero admitted to signing documents pertinent to the registration of Naurasidhu55 with the SEC.
However, they supposedly had no knowledge about the falsified document because a certain Gurpreet Singh actually processed the application.
The conviction of the incorporators and directors of Naurasidhu55 represents the fifth conviction that the SEC has won under a crackdown initiated in 2017 on illegal lenders, including those engaged in “5-6” schemes and other usurious practices.
According to the SEC, in the five cases decided so far, the concerned trial courts found 47 individuals, 22 of whom are foreigners, guilty beyond reasonable doubt of violating the LCRA.