Philippines' SEC Convicts Eight In Ongoing Lending Firm Crackdown

In an ongoing crackdown on lending company malpractice, the Securities and Exchange Commission (SEC) in the Philippines has achieved a significant victory. Eight officers from the lending firm Phil86 Gurunanak Lending and Trading Corp have been convicted of submitting false documents during their company's registration process.

The officers in question, namely Nicanor Borong, Nelson Henson, Irene Romero, Michael Ligaray, Regina Elizon, Gurjant Singh, Harnaib Singh, and Gurmeet Kaur, were found guilty by the Pasay City Regional Trial Court Branch 112 of violating the Lending Company Regulation Act (LCRA), Republic Act 9474. The decision, dated July 4, came after the officers entered a guilty plea to the act of falsifying their company registration documents. The court consequently ordered each officer to pay a P10,000 fine.

One additional officer, Tarsem Singh Dhaliwal, is slated for re-arraignment on August 1, with the expectation of his plea reflecting a similar admission of guilt.

The SEC pursued a criminal complaint against the offending officers following the discovery of false statements in their application for Phil86's incorporation. As part of their application, the group submitted a supposed certificate of bank deposit worth P1 million from the Banco de Oro-Two Shopping Center Branch located in Pasay City. The document aimed to fulfill the minimum paid-up capital required by the LCRA during the registration of a lending company.

However, upon verification with the bank, the SEC found that no such certificate was ever issued, leading to the denial of the companys application for registration as a lending firm. The LCRA dictates severe penalties for any officer, employee, or agent of a lending company found to have made false or misleading statements with respect to material facts in any application, report, or document required.

This marks the tenth conviction secured by the SEC for violations of the LCRA. In total, the agency has successfully convicted 86 individuals under this act. Alongside this, the SEC has secured two convictions under the Revised Penal Code, leading to the conviction of an additional 12 individuals.

The relentless efforts by the SEC in ensuring adherence to regulation and curbing malpractice within the lending industry are highly commendable. To date, the licenses of 39 financing or lending companies have been canceled, while 58 online lending applications have been instructed to halt operations due to a lack of proper authority to function as a lending or financing company.

Furthermore, the SEC has revoked the primary registration of 2,084 lending companies for non-compliance with the LCRA. The convictions and the subsequent penalties underscore the SEC's unwavering commitment to maintaining fair and transparent operations within the lending industry in the Philippines.

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