In a statement, the SEC said those behind the lending company were convicted for submitting falsified documents for its registration.
In its decision, 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 of violating Republic Act No. 9474, or the Lending Company Regulation Act of 2007 (LCRA).
The court accordingly sentenced each of the respondents, who formed Naurasidhu55 Lending and Trading Corporation 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.
Upon verifying with the bank, however, the SEC found that no such certificate was issued to Naurasidhu55 and no account existed under the name Imelda Singh and number stated in the certificate.
“As clearly provided by R.A. 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.
It added that, “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 R.A. 9474.”
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.
Yet, the court held that “[b]y submitting their Articles of Incorporation with the required documents to the SEC, they evidently attest, under oath, they have the required minimum paid-up capital of One Million pesos.”
“Well-settled is the presumption that a person, before signing a deed or instrument and before acknowledging it before a notary public, have read, understood, and fully knew the contents thereof,” it added.
The conviction of the incorporators and directors of Naurasidhu55 represents the fifth conviction the SEC has won under a crackdown initiated in 2017 on illegal lenders, including those engaged in “5-6” schemes and other usurious practices.
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.
The SEC, through the Corporate Governance and Finance Department (CGFD), has revoked the primary registration of a total of 2,081 lending companies to date for non-compliance with the LCRA.
In 2020, the Commission also revoked the secondary licenses, or Certificates of Authority to Operate as a Lending Company, of Super Cash Lending Corp., FCash Global Lending, Inc., and Unipeso Lending Company Inc., for committing unfair debt collection practices. The SEC likewise revoked the license of Robocash for its violation of the Financing Company Act.
Furthermore, the SEC ordered four online lending applications, namely CashAB, CashOcean, KwikPeso, and Little Cash, as well as their operators CashAB Lending Corp., Mimosa Credit Ltd., and Zamoya Credit Ltd, to cease operations for lack of authority to operate as a lending or financing company last year. The online lending operators were likewise found to have employed abusive collection practices.
“We remain steadfast in our crackdown on illegal, predatory and abusive lending practices, in line with our commitment to providing Filipinos secure and effective access to credit,” SEC Chairperson Emilio B. Aquino said.
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