The Securities and
Exchange Commission (SEC) has stripped Robocash Finance Corp.’s of authority to
operate as a financing company for running several branches without the
necessary license.
The Corporate Governance
and Finance Department (CGFD) of the SEC issued the order of revocation on
December 12, 2019 after establishing that Robocash violated the Implementing
Rules and Regulations of Republic Act No. 8556, or the Financing Company Act of
1998 (FCA IRR).
In the course of its
monitoring procedure, the CGFD found that Robocash operated several branches
without the requisite CA.
The findings were
validated through onsite audits on March 7, 2019 and July 5, 2019. Robocash
also confirmed the same during a hearing on September 20, 2019 and through
various letters to the SEC.
The CGFD on Nov. 13
issued a formal charge against Robocash and ordered the company to show cause
why its CA should not be revoked for violation of the Financing Company Act of
1998.
In its verified answer,
Robocash admitted to establishing and operating branches without the necessary
CA. The company, however, argued that it did not maliciously violate Section
6(a) of the FCA IRR by putting up branches without the necessary CA.
The CGFD found no merit
in the company’s defense, saying: “It may be well to note that Respondent was
able to secure thirty-two (32) CAs for thirty-two (32) separate branches. Thus,
it is even more appalling that despite being aware of the requirement of the
law, Respondent knowingly and willingly committed repeated violations thereof.”
Under Section 14 of the
FCA IRR, the SEC may suspend or revoke an erring financing company’s CA after
proper notice and hearing. The Commission may also impose a basic fine of not
less than P10,000.00 plus P100.00 for each day of continuing violation, but no
more than P100,000.00, and other sanctions within its power.
The CGFD initially
imposed monetary penalties against Robocash for violation of Section 6(a) of
the FCA IRR. The Department issued the corresponding orders on payment of
penalty on November 5, 6 and 7, 2019 for the company’s first, second and third
violation of the said rule.
“And, while it is true
that the Commission may impose penalties other than revocation of CA,
considering the number of times the Respondent knowingly and willingly committed
the same violation, the Department is constrained to rule, as it is hereby
ruled, that the revocation of Respondent’s CA is warranted under the
circumstances,” the CGFD noted.
“As a final note, while
the Respondent’s goal of catering to the needs of the underserved is laudable,
it must always be remembered that compliance with the provisions of the law is
foremost. The Department will not hesitate to impose the appropriate penalties
in cases of violation, even the extreme penalty of revocation of the Certificate
of Authority.”
The SEC has revoked the
primary registration of 2,081 lending and financing companies without the
necessary CA, in an ongoing crackdown on illegal lending and financing
activities.
The Commission has
likewise revoked the CA of two lending companies. Among them is Moola Lending
Corporation for violations of Republic Act No. 3765, or the Truth in Lending
Act, and of the terms and conditions of its CA under Republic Act No. 9474, or
the Lending Company Regulation Act, and its IRR.
The SEC also issued
cease and desist orders against 48 online lending applications for operating
without incorporating and securing CA. More information is available in the
Lending & Financing Companies page on the SEC website. (SEC release)
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