THE Securities and Exchange Commission (SEC) nullified the certificate of incorporation of Chiyuto Creative Wealth Documentation Facilitation Services for its unlicensed investment scheme.
Penalties were imposed against Chiyuto and sole stockholder Patrocenio Calvez Chiyuto, Jr. by the SEC Enforcement and Investor Protection Department. The total fees amounted to P9 million, the commission said in a statement on Tuesday.
Mr. Chiyuto is also banned from being a director in other corporations.
Chiyuto originally registered under a sole proprietorship at the Department of Trade and Industry. It applied for registration as a one-person corporation with the commission.
“Chiyuto’s activities further constitute serious misrepresentation as to what it can do to the great prejudice of or damage to the general public, which is a ground for the revocation of a corporation’s certificate of registration under Presidential Decree No. 902-A,” the SEC’s department said in a statement.
The order of revocation from the commission was issued on Monday, Feb. 15, after Chiyuto was found selling securities through an unauthorized “double-your-money roulette game.”
The game guarantees a 100% return on investments in one day, 30 days, or 45 days.
An investor can put in any amount ranging from one peso up to P1 million. Chiyuto will then be using a roulette to determine the payout schedule, after which investors will be given a promissory note stating the amount of return and when earnings may be claimed.
The commission said the scheme violates Section 44 of Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines.
Chiyuto also offered a five percent referral commission rate and held raffles of brand new cars and motorcycles.
The scheme involves securities that require registration with the commission. Chiyuto failed to register the securities and has not filed for authorization to sell securities.
“To make matters worse, the scheme being offered by Chiyuto bears the tell-tale signs of a Ponzi scheme, where the profits or payouts taken from the incoming investors or additional ‘pay-ins’ shall be paid to existing or earlier members-investors,” the SEC department said.
A Ponzi scheme involves a pyramid of investors, where new investors pay off the amount due to earlier investors.
On Aug. 18, 2020, the commission warned the public against investing in Chiyuto. Months later, an alert to investors was also issued through the commission’s Facebook page published on Oct. 23, 2020.
A cease-and-desist order was filed against Chiyuto on Feb. 1, and a show-cause letter followed on Feb. 2 prompting the corporation to defend itself in order to maintain its registration as a one-person corporation.
“That Don Chiyuto could not present any specific business plan or cite a profitable enterprise to finance his money-making scheme clearly shows that the investment scheme, which he and his companies foisted on the unsuspecting public, was fraudulent,” the SEC unit said.
Chiyuto’s paid-up capital amounted to P250,000 despite claiming it had hundreds of millions under its belt. — Keren Concepcion G. Valmonte