SEC Adm. Case No. 01-09-102 In the matter of BARLOW AND RAMSEY, INC. AND GRAND SHAW HOLDINGS, INC.

Securities and Exchange Commission SEC Building, EDSA, Greenhills, Mandatuyong City Republic of the Philippines Department of Finance

IN THE MATTER OF:

GRAND SHAW HOLDINGS, INC. BARLOW AND RAMSEY, INC. and SEC ADMIN. CASE NO. 01-09-102

COMPLIANCE AND ENFORCEMENT AND PROSECUTION DEPARTMENT DEPARTMENT, nOW ENFORCEMENT Petitioner

Y

DCIsIon

the Enforcement and Prosecution Department (EPD), on 13 January 2009. BARLOW AND RAMSEY, INC. (BRI) and GRAND SHAW HOLDINGS,INC. (GSHI) dated 09 January 2009, on the ground of fraud in procuring their certificates of registration filed by the Compliance and Enforcement Department (CED) of the Commission, now under Section 6 letter (l) subparagraph (1) of Presidential Decree 902-A as amended, For consideration is the Petition for Revocation of Corporate Registration of

FACTS OF THE CASE

Reg. No.CS200609861. Its primary purpose is: BRI is a corporation registered with the Commission on 21 June 2006 under SEC

"To engage in, conduct & carry on the business of buying, distributing, marketing and manufacturing of all kinds of goods and commodities, wares and contracts for export, import, purchase, acquisition, sale at wholesale or retail and merchandise of every kind and description; to enter into all kinds. of goods other disposition for its own account as principal or in representative capacity as manufacturer's representative, merchandise broker, indentor commission

Barlow And Ramsey, Inc. And Grand Shaw Holdings, Inc. Compliance And Enforcement Department now Enforcement And Prosecution Department Petitioner SEC ADMIN. CASE NO. 01-09-102 In' The Matter Of: Page 2 of 9 C

merchant, factors or agent, upon consignment of all kinds of goods, wares, merchandise or products whether natural or artificiai."

incorporators and first set of directors of BRI with their respective addresses, Million Pesos (Php 1,000,000.00) divided into One Hundred Thousand (100,000) shares with a par value of Ten Pesos (Php 10.00) per share. The AOI lists the following as the nationalities, and shares: Based on its Articles of Incorporation (AOI), BRI's authorized capital stock is One

1. Rosemarie S. Villamor 3. Analyn C. Diamante 5. Michael Mejia 2. Salve A. Mercado 4. Robert Mendoza Name T 1857 Rosario, Pasig City Address 18 Zeus St., Cupang, Antipolo 34 Balite St., Oro Vista, Cainta 2 St. Mary, Provident, MKNA 1857 Rosario, Pasig City I Filipino Nationality Filipino Filipino Filipino Filipino Shares 15,000 3,750 1,250 3,750 1,250

to its present name on 07 June 2006. Its primary purpose is: May 2006, under SEC Reg. No. CS 200608450. The first article of its AOI was amended GSHI was originally registered as "Grand Shaw Holdings Philippines, Inc." on 31

" xxx to acquire, hold, sell, exchange, deal, and invest in the stocks, bonds, or securities of any government or any subdivision thereof or any public corporation and in real property of all kinds in the same manner and to the same extent as and privileges or ownership, including the right to vote therein, or consent in portfolio or similar securities or to act as broker of securities." natural [sic] person, might could or would do, to exercise all the rights, powers respect thereof, for any and all purposes without however managing securities

into One Hundred Thousand (100,000) shares with a par vatue of Ten Pesos (Php 10.00) per share. The AOI lists the following as the incorporators and first set of directors of GSHI with their respective addresses, nationalities, and shares: GSHI's authorized capital stock is One Million Pesos (Php 1,000,000.00) divided

1. Melody T. Lim 2. Melanie B. Guinto 3. Menchu G. Gregorio 4. Isabella C. Mendoza 5. Jennifer San Martin Name Address 758 S. Padilla St. Manila 38 CRM Dulce Las Pinas City 1841 Blumentritt St. Manila 328 Carvajal St. Manila 3104 Redemptorist Road Filipino Nationality Filipino Filipino "Filipino Filipino Shares 500 500 500 500 500

Compliance And Enforcement Department now Enforcement And Prosecution Department Petitioner In The Matter Of: Barlow And Ramsey, Inc. And Grand Shaw Holdings, Inc. SEC ADMIN. CASE NO. 01-09-102 Page 3 of 9 G

having its office address'on the 15th Floor Sanno Park Tower, 2-11-1, Nagatacho, their office received complaints against a certain "Barlow and Ramsey" purportedly Meng (Lim), Head, Maritime and Investment Fraud Branch Commercial Affairs Department of the Singapore Police Force, Ministry of Home Affairs. According to Lim, Chiyoda-ku, Tokyo 100-613, Japan. On 12 September 2006, EPD received a 21 August 2006 letter 1 from Lim Kok

fast moving stock of Bayer from Germany. Only one of them responded by buying 150 units of Bayer shares valued at Sing $ 2226, who remitted the money on 08 May 2006 Pacific Tower Branch in Ayala Avenue, Makati Metro-Manila, Philippines. The name of the beneficiary was Grand Shaw Holding Group Pte. Ltd. Thereafter, complainant was valued at US$ 21,210 and, after offsetting the sale proceeds of Bayer shares at US$ 7,401.54, the complainant was asked to send, via teiegraphic transfer, US$ 13,808.46 to the same account with Export & Industry Bank. to account no. 002-113-9-334-4 with Export & Industry Bank located at the Rufinc asked to sell off the Bayer shares and to buy 4,000 shares of China Creswell shares Barlow and Ramsey made cold calls2 in April to June 2006, inducing them to purchase Lim wrote that according to two complainants, a certain company in the name of

the amount of Sing$ 1,800. After this, complainant stopped sending payments and decided to file a police report on the cold call scam. as he was not given any documentation of share purchase for the Bayer shares. He suggested that he pay the US$13,808.46 by installment. Barlow and Ramsey agreed to this proposal and on 17 June 2006, the complainant sent another telegraphic transfer in At this point, complainant became uncomfortable with the transaction inasmuch

"Barlow and Ramsey Co." and "Grand Shaw Holding Group Pte. Ltd." However, CRMD listed the nearest similar names, as Grand Shaw Holdings Philippines Inc. with SEC Reg. request of EPD, the Company Registration and Monitoring Unit (CRMD) of the Commission issued a Certification of Non-Registration of Corporation 3 dated 17 January No. CS200608450 and Barlow and Ramsey Inc. with SEC Reg. No.CS200609861. 2007 stating that available records of the Commission do not show the registration of In response, EPD formed an investigating team to look into the matter. Upon the

2 A method used by brokers to obtain new business by making unsolicited calls to potential clients. 3 Petition dated 09 January 2006, Annex "G", Record p.39. 1 Petition dated 09 January 2006, Annex "F", Record p.41. Source:http://www.investopedia.com/terms/c/coldcalling.asp accessed 23 March 2012.

Compliance And Enforcement Department now Enforcement Barlow And Ramsey, Inc. And Grand Shaw Holdings, Inc. And Prosecution Department Petitioner SEC ADMIN. CASE NO. 01-09-102 In' The Matter Of: Page 4 of 9

April 2007 4 that per records filed with MRD, Grand Shaw Holdings Philippines Inc. with SEC Reg. No. CS200608450 and Barlow and Ramsey Inc. with SEC Reg. No.CS200609861 have not been issued any secondary licenses to act as broker/dealer in securities, dealer in securities, dealer in government securities, investment adviser of an investment company, investment house and transfer agent. The Market Regulation Department (MRD) also issued a Certification dated 19

(Melody T. Lim and Menchu G. Gregorio). were sent to each of the incorporators at their respective addresses indicated in the AOI of respondent GSHI through EPD's process server, Edgardo R. Grueso (Grueso), to obtain testimonies of the incorporators. 5 But Grueso was unable to serve alt the Notices because either the incorporators listed in the AOI were not known at the given addresses (Isabella C. Mendoza and Melanie B. Guinto) or the addresses listed in the AOI were misleading (Jennifer San Martin), or the individuals could not be located Notices Requiring Appearance at an Examination (Notices) dated 17 April 2007

the EPD investigating team (the Team), which made an ocular inspection of the address of the principal office reflected in the AOI, showed that the given address was false. met with the building administrator, Edward J. Bundal (Bundal), who informed the Star Centrum Building. When showed the list of names of the incorporators and Team that there was no such company holding office, nor that used to hold office in directors of GSHI, Bundal assured the Team that he did not know any of them. The Team went to the Star Centrum Building located at Sen. Gill Puyat Ave., Makati and The Summary Report 7 of the field investigation conducted on 24 May 2007 by

incorporators of GSHI at their respective addresses, but they were not served, for the same reasons (misleading addresses, individuals cannot be located, not known at the given address).8 The Team then proceeded to each of the barangays having jurisdiction over the addresses reflected in the AOI, and the respective Barangay Captains issued Certifications. EPD summarized1 the contents of the Certifications, thus: Requiring Appearance at an Examination dated 15 February 2008 to each of the The Team likewise conducted its own surveillance by serving another Notice

4 Id., Annex "H" Record p. 38. 5 Id., par. 18. p.70. 8 Stated in the Affidavit dated 18 September 2007 of the EPD's process server, Grueso. 9 Id., Annexes "P ", "Q""R", "S", "T". 10 Id., paragraph 23, Record p.'69. Id., Annex "I" Affidavit executed by Edgardo R. Gruesco, dated 18 September 2007, p. 37. 7 Id., Annex "J" Record p. 29.

Compliance And Enforcement Department now Enforcement And Prosecution Department Petitioner] Barlow And Ramsey, Inc. And Grand Shaw Holdings, Inc. SEC ADMIN. CASE NO. 01-09-102 Page 5 of 9 In The Matter Of:

Nameand Paranaque Bannag St., Pienda, Pasig City Incorporator/ specified in the Articles of Incorporation of GRAND ISABELLA 3104 SHAW Redemptorist C. City MENDOZA Address. and Director Rd. 65 Of Date of Delivery of Notice and at Pasig address on Feb address on February 21, 2008 20, 2008 Requiring Appearance at an Examination Delivered at Paranaque Reason for Failure to Address is valid but addressee does not reside at the given respective Barangay address Deliver as stated in the Certifications issued by Chairman

Blumentritt St., Manila MELANIE B. QUINTO- 1841 JENNIFER L. SAN MARTIN-38 CRM Dulce St., Las Pinas City MELODY T.LIM-758 S. Padilla MENCHU G. GREGORIO -328 Carvajal St., Binondo, Manila St., Sta. Cruz, Manila A February 21, 2008 February 26,2008 February 26, 2008 March 3,2008 Address is not valid; is unknown Address is not valid; address does not exist Address is valid but addressee Addressee has not heid office or resided address existent at the given non-

unknown, or could not be located.11 BRI, which yielded the same results. The Notices Requiring Appearance at an the Notices at the addresses reflected in the AOI because the addresses were either process server, Rodrigo G. Gamboa (Gamboa) who, like Grueso, was not able to serve Examination dated 19 April 2007 were sent to each director/incorporator through EPD's The same processes of investigation and surveillance were conducted by EPD on

informed the Team that she did not have any knowledge of BRI. She was showed a BRI iocated at Unit 1802 88 Corporate Center, Salcedo Village, Makati City, to validate the same. The Team was able to speak with the building administrator of the Corporate Center, Garry G. Valenzuela (Valenzuela), who informed them that there was no company holding office nor that used to hold office within the building, by the name of "Barlow and Ramsey, Inc." Valenzuela told them that Dial Magic Inc.(DMI), a call center, has been occupying Units 1802 and 1803 since 15 April 2006. This is went to the head office of DMI, iocated at the 14th Floor of Banco de Oro Building in Paseo De Roxas, Makati City and met its Legal Counsel, Ma. Cristina G. Laderas, who significant, since BRI's AOI is dated 21 June 2006. The Team went to look at Unit 1802 and saw that it was, indeed, the outbound office of DMI, a call center office. They also On 06 June 2007, the Team made an ocular inspection of the principal office of

11 Id., Annex "U" Record p. 17.

Barlow And Ramsey, Inc. And Grand Shaw Holdings, Inc. And Prosecution Department Petitioner SEC ADMIN. CASE NO. 01-09-102 Compliance And Enforcement Department now Enforcement Page 6 of 9 In The Matter Of: G

incorporators or directors listed therein.12 copy of the AOI of BRI, but she told the Team that she did not know any of the

the addresses indicated in the AOI each issued a Certification,13 which the EPD addresses appeared fictitious, and where some addresses were valid, the incorporator concerned was not known at the given address. The respective Barangay Chairmen of summarized as follows: Examination to each incorporator, but their efforts merely confirmed the report of the process server, Gamboa. The Team failed to serve the Notices because some of the Likewise, the Team personally delivered the Notices Requiring Appearance at an

Name St., Oro Vista, Cainta, Rizal Salve A. Mercado-34"Balite [April 1, 2008 AND RAMSEY Michael Mejia-1857 Pasig City Robert Mendoza-1857 Rosario, Pasig City Mary St., Provident Village, Marikina City Zeus Incorporator/ Incorporation of BARLOW Analyn C. Diamante-No. 2 St. Rosemarie S. Villamor Antipolo City specified in the Articles of St.. and Bgy. Address Director Rosario, Cupang, of Date of Delivery of Notice 18 .February 28, 2008 March 28, 2008 February 20, 2008 an Examination Requiring Appearance at February 20, 2008 Reason for Failure to respective Barangay Address is not valid, no such Address is valid but addressee Address is incomplete, exact name of the subdivision is not Certifications issued by Chairman Address is not valid, no such is unknown at the given address Address does not exist Deliver as stated in the street as Rosario street as Rosario stated

to submit/provide OGC, within five (5) days from receipt, with the correct and complete Counsel (OGC), issued an Order dated 14 January 2009, directing the Board of Directors and any of the responsible officers of BRI and GSHI to file their respective Comments/Oppositions thereto within fifteen (15) days from receipt thereof. On 04 February 2009, OGC issued another Order addressed to petitioner EPD, requesting EPD addresses of the concerned parties for the purpose of serving the 14 January 2009 Order, inasmuch as said Order remained unserved due to inexistent addresses, wrong addresses, and the like. Acting on the Petition of EPD, the Commission, through the Office of the General

12 Id., Annex"V" Record pp.11 & 12. 13 Id., Annexes "BB", "CC","DD","EE", "FF"

And Prosecution Department Petitioner SEC ADMIN. CASE NO. 01-09-102 Barlow And Ramsey, Inc. And Grand Shaw Holdings, Inc. Compliance And Enforcement Department now Enforcement In The Matter Of: Page 7 of 9

are unknown and cannot be ascertained. In an Order dated 25 March 2009, 0GC the expense of the Commission pursuant to Section 4-9 Rule IV of the 2006 Rules of Procedure of the Commission, for the reason that the whereabouts of the respondents Summons addressed' to BRI and GSHI requiring them. to file their respective Answers/Comments/Oppositions to the Petition within fifteen days (15) days after service of summons, otherwise, a judgment by default will be taken against them for the relief prayed for in the Petition. granted the Motion, finding merit in the same. On 03 April 2009, OGC issued a Service of Summons by Publication, praying that summons by publication be issued at On 25 February 2009, EPD filed :with the OGC a Motion for Leave to Effect

2010 OGC, and submitted: 1) Copies of the Affidavit of Publication with attached newspaper showing the publication of the 25 March 2009 Order (Order) and the 03 April 2009 Summons (Summons) published in the Manila Standard Today on 03 June 2009; and 2) Certification dated 21 September 2010 from the Director of the Economic the Summons issued by the OGC and the Petition for Revocation filed by the EPD dated 09 January 2009 were posted in the SEC website. Research and Information Department of the Commission stating that the Order and On 23 September 2010, EPD filed its Compliance with the Order dated 23 July

ISSUE

6 par. I (1) of Presidential Decree No. 902-A. (BRI) and GRAND SHAW HOLDINGS, INC. (GSHI) should be revoked based on Section Whether or not the certificate of registration of BARLOW AND RAMSEY, INC.

RULING

The petition is impressed with merit.

Section 6 letter (I) subparagraph (1) of Presidential Decree 902-A provides:

of the grounds provided by law, including the following: certificate of registration of corporations, partnerships or associations, upon any Section 6. shali possess the following powers: 1 . To suspend, or revoke, after proper notice and hearing, the franchise or Fraud in procuring its certificate of registration; In order to effectively exercise such juirisdiction, the Commission

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Compliance And Enforcement Department now Enforcement Barlow And Ramsey, Inc. And Grand Shaw Holdings, Inc. SEC ADMIN. CASE NO. 01-09-102 Page 8 of 9 And Prosecution Department Petitioner In The Matter Of: S

rather than for the purpose of conducting legitimate business. perpetuating fraudulent activities to the damage and prejudice of the dealing public, EPD alleges that BRI and GSHI were incorporated for the purpose of

Prisco, Jr. and Alice Cal vs. Mariano A. Zosa, et al.,15 the Supreme Court held that: In Heirs of Manuel A. Roxas, et al. vs. Court of Appeals, et al.,14 cited in Spouses

an actual design to commit positive fraud or injury upon other persons." proceeds from an intentional deception practiced by means of the misrepresentation or concealment of a material fact. Constructive fraud is construed as a fraud because of its detrimental effect upon public interests and public or private confidence, even though the act is not done or committed with "Fraud is of two kinds: actual or constructive. Actual or positive fraud

that fraud mentioned in Section 6 letter (l) subparagraph (1) of P. D. 902-A as one of the grounds for the revocation of a certificate of registration of a corporation, corporation, partnership or association and the same must be contained or connected with the documents or papers presented to the Commission for the registration of the same. partnership or association, refers to fraud attendant in the registration of the In the case of Charyn Marketing Enterprise Corporation,16 the Commission held

Section 14 of the Corporation Code17 provides:

signed and acknowledged by all of the incorporators, containing SECTION 14. Contents of the articles of incorporation. Commission articles of incorporation in any of the official languages duly organized under this code shall file with the Securities and Exchange substantially the following matters, except as otherwise prescribed by this Code 5. The names, nationalities and residences of the incorporators; xxxxxx (Emphasis ours) or by special law: xxxxxx - All corporations

presented substantial evidence that both BRI and GSHI's submitted sworn AOIs contain Commission for the issuance of a certificate of registration. In this case, EPD has The sworn AOI of a corporation is among the documents required by the

16 In the Matter of Charyn Marketing Enterprise Corporation, SEC Case No. 03-05-49. 17 Batas Pambansa BIg. '68 (May 1, 1980). 14 G.R. No. 118436 March 21, 1997 15 G.R. No. 152518 July 31, 2006.

Compliance And Enforcement Department now Enforcement Barlow And Ramsey, Inc. And Grand Shaw Holdings, Inc. SEC ADMIN. CASE NO. 01-09-102 in The Matter Of: And Prosecution Department Petitioner Page 9 of 9

were incomplete,19 Hence, the evidence gathered by the EPD and the circumstances were fraudulent, which is squarely within the contemplation of Section 6 letter (I) subparagraph (1) of Presidential Decree 902-A. false, fictitious, and/or invalid principal office addresses.? addresses of the incorporators listed in the AOIs were either false, did not exist, or surrounding the two corporations indicate that the entries in the AOIs submitted to the Commission in support of the applications for their respective certificates of registration 18 Moreover theother

No. CS200609861 and GRAND SHAW HOLDINGS, INC. with SEC Reg. No. CS 200608450 are hereby REVOKED, for fraud in the procurement of their certificates of registration as provided in Section 6 letter (l) subparagraph (1) of Presidential Decree 902-A as amended. The Certificates of Registration of BARLOW AND RAMSEY, INC. with SEC Reg. WHEREFORE, premises considered, the instant petition is hereby GRANTED.

a copy of this Decision for its appropriate action. Let the Company Registration and Monitoring Department be also furnished with

SO ORdERED.

Mandaluyong City, 11 October 2012.

TERESITA J. HERBOSA R Chairperson

A0 MA.buAnItA e Commissione JeTO RAUL J. PALABRICA Commissioner

MANUEL HUBERTO B. GAITE Commissioner EladIo(m. Jala Commiss Sioner

18 Op. cit., note 7 and Annex "V" Records p. 12.. 19 Petition Annex "I"" Record p. 37; Annexes "P", "Q","R","S", & "T"; and Annex "U" Record p. 17; and AnneXes "BB","CC", "DD""EE" and "FF"