THE Securities and Exchange Commission (SEC) has revoked the corporate registration of Wellcons Unlimited Systems, Inc. for offering a scheme that supposedly allows investors to double their money within six months, among others.
The SEC order said the company’s activities constituted serious misrepresentation as to what it can do, to the great prejudice of or damage to the general public, making it a ground for the revocation of a corporation’s certificate of registration under Section 6 of Presidential Decree No. 902-A.
“Considering that nowhere is it stated in the primary purpose clause of Wellcons in its Articles of Incorporation that it is authorized to engage in the selling or offering for sale of securities to the public, coupled with the fact that it does not have the necessary Permit to Offer and Sell Securities, the activities of Wellcons of selling or offering for sale securities in the form investment contracts is considered an ultra vires act and therefore constitute serious misrepresentation,” the order read.
Before the SEC order, the Davao City anti-scam unit padlocked the office of Wellcons in Matina Crossing, McArthur Highway.
On July 5, the SEC Enforcement and Investor Protection Department (EIPD) said it had found Wellcons offering and selling securities without a license, which is an unlawful act under Section 44 of Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines.
As early as Feb. 2, the SEC had warned the public against investing in Wellcons through an advisory. On June 23, amid the company’s continued operations, it issued a cease-and-desist order.
The company has been offering investment packages worth P2,500 to P13,890 under a so-called binary system that promises returns of up to P9,000 to P32,000 per day. Members who availed can further earn through Wellcon’s pangkabuhayan (livelihood) program, where they can supposedly double their money within six months based on investment packages worth P1,500 to P5,000.
The EIPD further noted that Wellcons’ double-your-money scheme through its pangkabuhayan program resembles a Ponzi scheme, where the profits or payouts taken from incoming investors are paid to existing or earlier investors.
“[I]n a nutshell, [Wellcons’ scheme is] encapsulated by the saying ‘robbing Peter to pay Paul’ — considering that it does not have any underlying legitimate business where it could source its promised return on investments to its investors,” the order said.
Wellcons registered with the commission on April 19, 2021 with the primary purpose of distributing products through multi-level marketing, buying and selling, and marketing through online channels, as permitted by law, goods, and merchandise that primary target the basic needs of individuals and households. — Justine Irish DP. Tabile