The Securities and Exchange Commission (SEC) has secured its fifth legal victory against illegal lending firms after a Pasay court convicted the incorporators and directors of Naurasidhu55 Lending and Trading Corp. for submitting falsified documents for its registration.
In a decision dated February 8, the Pasay City Regional Trial Court Branch 111 found Danica E. Gerero, Imelda C. Singh, Diven E. Gerero, Jasvir Singh and Jaswant Singh guilty for violation of the Lending Company Regulation Act (LCRA) of 2007.
The court sentenced each of the respondents, who formed 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.
Naurasidhu55 submitted a Certificate of Bank Deposit in the amount of P1 million, that it claimed was 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.
The LCRA penalizes with a fine ranging from P10,000 to P50,000 or imprisonment of not less than 6 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.
“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 chairman Emilio B. Aquino said.
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 since in 2017. The agency targeted illegal lenders, including those engaged in “5-6” schemes and other usurious practices. In the 5 cases decided so far, the 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.