SEC Admin Case No. 10-09-109 In the matter of: Phil-Asia Care Plans, Inc., Enforcement and Prosecution Department, Petitioner

Republic of the Philippines Department of Finance Securities and Exchange Commission PICC Secretariat Building, PICC Complex, Pasay City

In the matter of: PHIL-ASIA CARE PLANS, INC.

SEC Admin Case No. 10-09-109

DEPARTMENT, ENFORCEMENT AND PROSECUTION Petitioner

DECISION

P.D. 902-A; and (2) Serious Misrepresentation under Section 6(i)(2) of P.D. 902-A. 23 October 2009 by the then Enforcement and Prosecution Department (EPD)--now known as the Enforcement and Investor Protection Department (EIPD)-praying that the Commission hereby REVOKE the Certificate of Registration of PHIL-ASIA CARE PLANS, INC. on the grounds of: (1) Defiance of Lawful Order under Section 6(i)(3) of This resolves the Petition for Revocation of Corporate Registration1 filed on

RELEVANT FACTS

A.PHIL-ASIA,ITS DIRECTORS AND OFFICERS

1.PHIL-ASIA CARE PLANS, INC.(PHIL-ASIA) was originallyincorporated as it changed its corporate name via Amendment of its Articles of Incorporation (AOI) on 12 December 1990.3 Its primary purpose is: Consolidated Care Plan, Inc. on 5 August 19882 under SEC Registration No. 153936;

other type of Pre-need plans and services to be delivered in the future to subscribers, purchasers or planholders to manage, buy, sell[] all type[s] of merchandise, equipment and/or services pertaining to the Pre-need business. [t]o engage in the business of organizing, establishing, developing, conducting. maintaining, operating, marketing, and selling (memorial plans), as well as (Emphasis supplied)

2 Based on PHIL-ASIA's latest General Information Sheet (GIS)4 filed in 2008, its Directors and Officers are as follows:

Residence VICENTE R. AFULUGENCIA FRANCIS T. AFULUGENCIA JOJI T.AFULUGENCIA PAULO VICENTE T.AFULUGENCIA LOUIE EMERSON T. AFULUGENCIA TEODOLFO A.REGENTE GEORGE T.AFULUGENCIA Member Member Member Member Chairman Member n/a n/a VP&Treasurer EVP - Operations Manager,Collection Dept n/a n/a President&Gen.Manager n #54Eagle StreetSto. 6 Mapalo Drive,Sierra Monte Villas, Batasan Hills,Quezon City Banilad,Cebu City Nino Village, Barangay

2 Certificate of Registration dated 5 August 1988 (Annex A of Petition for Revocation) 1 Dated 21 October 2009. 3 Amendment of AOI dated 12 December 1990 (Annex B of Petition for Revocation). 4 2008 General Information Sheet (Annex C of Petition for Revocation).

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JOSE MARIA T. AFULUGENCIA ATTY. EMILIANO DELIVERIO n/a Member Corporate Secretary nla

B. CD0 AND ORDER AGAINST PHIL-ASIA IN 2002

3. In early 2002, the Commission was notified by PHIL-ASIA's planholders and former salesmen that the company was continuing to issue and sell Pre-need plans for the years 2000-2002, even though it no longer had authority to sell Pre-need plans.

4 On 22 March 2002, the Commission's Non-Traditional Securities and Instruments

Department--now known as the Corporate Governance and Finance Department (CGFD)-issued a negative Certification5 against PHIL-ASIA, to wit:

b a C d e. PHIL-ASIA has no Dealer's License since 1996; PHIL-ASIA has no Pre-need plans available for sale since 1993; PHIL_ASIA failed to comply with all the Commission's requirements for a pre-need PHIL_ASIA has no Salesmen's Permit; PHIL-ASIA has no authority to operate a branch; company and therefore is not authorized to sell new pre-need plans.

5 On 28 May 2002, the Commission issued a Cease and Desist Order (CD0) against

PHIL-ASIA, enjoining the sale of pre-need plans and the collection of premiums.

6 On 3 September 2002, the Commission issued an Order? which made permanent

the CDO against PHIL-ASIA.

After the issuance of the CDO, PHIL-ASIA continued to offer and sell Pre-need plans in Laguna, Nueva Ecija, and Quezon City from, as shown by the following:

Floro C. Pagaduan, Jr.1 Teresita G. Canceran11 Planholder Rhodora Salvias Trinidad S. Raylana12 Marifi M.Zubia9 LPA Number 39823C 21494C 84768C 78918 130287 Life Plan Type Supreme Harmonious Harmonious Harmonious Harmonious Plan Value P15,000 P50;000 P15,000 P15,000 P15,000 Date 13 January 2003 13 June 2002 2 July 2002 10 December 2004 2 October 2004

C.CRIMINAL CASES AGAINST PHIL-ASIA

8.In 2003, the Commission also filed four (4) criminal cases 13against PHIL-ASIA, for violation of the Securities Regulation Code (SRC), before the Regional Trial Court (RTC) of Mandaluyong, namely:

b a. Criminal Case No. MC03-6766; Criminal Case No. MC03-6767

6 CDO dated 28 May 2002 (Annex E of Petition for Revocation). 1 Complaint-Affidavit of Floro C. PagaduanJr. Annex I of Petition for Revocation 12 Complaint-Affidavit of Trinidad S.Raylana Annex K of Petition for Revocation 7 Order dated 3 September 2002 (Annex F of Petition for Revocation). 8 Complaint-Affidavit of Rhodora Salvia (Annex G of Petition for Revocation) Complaint-Affidavit of Marifi M. Zubia (Annex H of Petition for Revocation). 11 Complaint-Affidavit of Teresita G.CanceranAnnex J of Petition for Revocation 13 Informations in the 4 criminal cases (Annexes L,M,N,O of Petition for Revocation. 5 Certification dated 22 March 2002 (Annex D of Petition for Revocation)

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Criminal Case No. MCO3-6769. Criminal Case No.MC03-6768

D. PHIL-ASIA'S PETITION FOR CERTIORARI

9. Meanwhile, PHIL-ASIA filed a Petition for Certiorari (with prayerfor Preliminary Injunction) before the Court of Appeals (CA), assailing the CDO dated 28 May 2002 and the Order dated 3 September 2002. This case was docketed as CA-GR SP No. 73009.

10.On 29 August 2003, the CA issued a Resolution14 which granted PHIL-ASIA's Petition and thus enjoined the Commission from implementing the CDO and Order against PHIL-ASIA.

11. On 12 September 2008, however, the CA issued a Decision15 reversing itself; it thus dismissed PHIL-ASIA's Petition and dissolved the injunction.

12. PHIL-ASIA filed a timely Petition for Certiorari before the Supreme Court, assailing the CA Decision dated 12 September 2008.

13. On 20 April 2009, the Supreme Court issued a Resolution16 dismissed PHIL-ASIA's Petition, stating that it failed to show reversible error on the part of the CA.

E.COMPLAINTS AGAINST PHIL-ASIA IN 2008 14. On 18 September 2008, a group of planholders from Catanduanes ("Catanduanes Group") filed their Complaint-Affidavits17 stating that PHIL-ASIA sold them Pre-need 017 Salvacion Street, Virac, Catanduanes, represented by Vicente R. Afulgencia (Chair/Pres/GM) and a certain Leonisa Rana. These plans were sold at the time when the injunction against the Commission was still in effect (from 29 August 2003 to 12 September 2008) plans from January 2007 to January 2008. PHIL-ASIA reportedly held office at No.

15. Subsequently, a group of planholders from Manila ("Manila Group") also submitted September 2008 their Complaint-Affidavitsi8 stating that PHIL-ASIA sold them Pre-need plans from May 2005 to February 2009. PHIL-ASIA reportedly held office at Sta. Cruz, Manila, represented by a certain Cristita D. Amor. These plans were sold at the time when the injunction against the Commission was still in effect: however. PHIL-ASIA continued to collect premiums even after the CA reversed itself and dissolved the injunction on 12

16. Both the Catanduanes group and the Manila group alleged that they had no knowledge that PHIL-ASIA had no authority to sell Pre-need plans. Recall that, as

15 CA Decision dated 12 September 2008 (Annex Q of Petition for Revocation). 14 CA Resolution dated 29 August 2003 (Annex P of Petition for Revocation). 16 SC Resolution dated 20 April 2009 (Annex R of Petition for Revocation). 1 Complaint-Affidavits of Catanduanes planholders (Annexes S,T,U,VW, X,Y of Petition for Revocation. is Complaint-Affidavits of Manila planholders (Annexes Z, AA, BB, Cc, DD, EE of Petition for Revocation).

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per the [CGFD's] negative Certification19 dated 22 March 2002, PHIL-ASIA had none of the necessary licenses to sell pre-need plans.

F. SERVICE OF SUMMONS ON PHIL-ASIA

17. On 10 February 2010, the Commission's Office of the General Counsel (0GC), issued Summons to PHIL-ASIA (through the Mauricio Law Firm, residing in Quezon City) and its Directors and Officers (residing in Quezon City and Cebu). As to the Directors and Officers residing in Cebu, the Summons were forwarded to the Commission's Cebu Extension Office.

18. On 16 April 2010, the 0GC received a Manifestation dated 30 March 2010 from the Mauricio Law Office stating that the Summons could not be validly served since PHIL-ASIA no longer held office at that temporary address. 19. On 14 July 2016, the OGC issued an Order, clarifying that the Summons on PHIL. ASIA should have been served at its registered address in its 2008 GIS.

20. On 18 July 2016, the Petitioner EPD submitted a Compliance, agreeing to serve the Summons on PHIL-ASIA at its last known address, as indicated in its 2008 GIS. Meanwhile, Summons on each of the Directors and Officers would be at their respective Quezon City and Cebu addresses.

21. On 26 July 2016, the 0GC issued an Order confirming that the addresses cited in considered the correct addresses for purposes of Summons. EPD's Compliance (i.e., the last-known addresses in the 2008 GIS) should be

22. On the same day, the OGC issued Summons to PHIL-ASIA and its Directors and Officers at the following addresses:

Directors/Officers#54 Eagle Street, Sto. Nino Village, Barangay Banilad, Cebu City Directors/Officers #6 Mapalo Drive, Sierra Monte Villas, Batasan Hills, Quezon City PHIL-ASIA in Cebu in QC Unit 1602 16/F Summit I Building, 530 Shaw Boulevard, Mandaluyong City

23. On 27 July 2016, the 0GC sent a Memo and the Summons on Directors and Officers residing in Cebu to the Cebu Extension Office, which the latter received on 3 August 2016.

24. On 2 August 2016, Doms Aguilar, an authorized process server of the Commission, executed an Affidavit of Service stating that Summons could not be served at the common address of the Directors and Officers in Quezon City because they had moved out, according to the Security Guard there. 25. On 8 August 2016, Eric Lintes, another process server of the Commission, executed Receptionist there. an Affidavit of Service stating that Summons could not be served at the address of PHIL-ASIA at Shaw Boulevard because it had moved out according to the

19 Supra, Note 5.

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26. On 15 August 2016, Larisa H. Polinar, of the Commission's Cebu Extension Office, executed an Affidavit of Service stating that Summons could not be served at the common address of the Directors and Officers in Cebu because they could not be found. Upon inquiry with the Homeowners' Association, she learned the D/O allegedly residing there were never recorded as'owners/occupants.

27. On 29 November 2016, the EPD filed a Motion (dated 15 November 2016) for Leave to Effect Summons by Publication, because the personal summons to the Respondents were returned unserved, as none of them could be found.

28. On 12 December 2016, the 0GC issued an Order allowing service of Summons by the SEC website, where it can still be found. publication. Thus, the Summons was published on 19 December 2016 at 3:27 PM on

29. To date, almost 6 months later and well-beyond the fifteen (15) day period given, the Respondents have not filed any response to the EPD's Petition.

ISSUE

revoked, under PD 902-A, for Defiance of Lawful Order and/or Serious Misrepresentation. Whether or not the SEC Registration of PHIL-ASIA can be

DISCUSSION

30. Under Section 6(i) of PD 902-A a corporation's Certificate of Registration may be revoked, inter alia, for the following reasons:

Refusal to comply or defiance of any lawful order of the Commission restraining commission of acts which would amount to a grave violation of its franchise20

Serious misrepresentation as to what the corporation can do or is doing to the great prejudice of or damage to the general public21

31. Here, as per the negative Certification22 of the [CGFD], PHIL-ASIA did not have the recounted in the Complaint-Affidavits25 of the planholders from Laguna, Nueva Ecija and Quezon City from June 2002 to December 2004, was a defiance of lawful necessary license to sell Pre-need plans. Thus, the Commission's CD023 (28 May 2002) and subsequent Order24 making the CD0 permanent (3 September 2002) were both lawful orders. PHIL-ASIA's continued selling of Pre-need plans, as orders of the Commission.

22 Supra, Note's. 24 Supra, Note 7 23 Supra, Note 6. 25 Supra, Notes 8-12. 21 Section 6(i)(2) of PD 902-A. ection 6(i)(3) of PD 902-A.

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32. Moreover, whenever PHIL-ASIA sells Pre-need plans, it presents itself to the buying making a serious misrepresentation that it is licensed to sell Pre-need plans. public as an entity licensed to sell these plans, which it is not. In other words, PHIL ASIA, whenever it sells, or even when it merely collects premiums on plans sold, is

33. Besides the evidence of selling in Laguna, Nueva Ecija, and Quezon City from June corroborated by receipts for premium payments, from multiple planholders in in continuous selling of Pre-need plans without the license to do so. 2002 to December 2004,there is evidence of further selling from May 2005 to February 2009 to the Manila Group. Furthermore, there is evidence that from January 2007 to January 2008, PHIL-ASIA was simultaneous selling to the Catanduanes Group. Therefore, it has been sufficiently shown (with affidavits different cities) that from June 2002 to February 2009, PHIL-ASIA was engaged

34. Because of the CA Resolution in CA-GR SP No. 73009, there was a time when the misrepresentation because it had no license to sell. the pendency of the injunction, PHIL-ASIA nonetheless committed serious Commission was enjoined from enforcing the CD0 and Order (i.e, from 29 August 2003 to 12 September 2008); however, it did not confer any authority upon PHIL- ASIA to sell pre-need plans at that time. PHIL-ASIA lack of license to sell Pre-need plans did not stem from the CDO/Order. Thus, even if there was never any CDO/Order, PHIL-ASIA would not be licensed to sell Pre-need plans._Assuming arguendo that PHIL-ASIA's sales activities were not violating a lawful order during

Certificate of Registration No. 153936, issued to PHIL-ASIA CARE PLANS, INC. is hereby REVOKED based on Sections 6(i)(3) and 6(i)(2) of PD 902-A. WHEREFORE, premises considered, the Petition is hereby GRANTED. The SEC

a copy of this Decision. Let the Company Registration and Monitoring Department (CRMD) be furnished

SO ORDERED.

Pasay City, Philippines; 27 July 2017.

TERESITA J. HERBOSA Chairperson

Natni ANTONIETA F.IBE Commissioner EMILIOB com AO

EPHYRO LUIS B. AMATONG Commissioner Ww AMES Commissioner VITERBO