GOLDEN KOI LENDING TECH CORP. doing business under the name/s and style/s of RUSHYKEY, MAGIC PURSE, MECHA POCKET, STALOAN, GOPERA, and LENDA

Exchange Securities and Commission IAGONG FINANCING AND LENDING COMPANIES DEPARTMENT IN THE MATTER OF: FinLenD Order No.2025-07 GOLDEN KOILENDING TECH CORP.DOING BUSINESS UNDER THE NAME/S AND STYLE/S OF RUSHYKEY MAGIC PURSE,MECHA POCKET,STALOAN,GOPERA AND LENDA Respondent. For: VIOLATION OF MEMORANDUM CIRCULAR NO.19,SERIES OF 2019,MEMORANDUM CIRCULAR NO.10,SERIES OF 2021,AND COMPANY REGULATION ACT OF 2007 REGULATIONS THE IMPLEMENTING OF THE RULES LENDING AND ORDER Respondent's primary purpose is: goldenkoi.lendingtech@gmail.com; and goldenkoijeanny@gmail.com; arising from the Show Cause Letter various violations of regulations implemented by Securities and Exchange Commission (SEC). The Respondent or Golden Koi),a registered lending company with Company Reg.No.2022070058482-26 and Certificate of Authority (CA) No. L-22-0219-15,with registered address at 4th Floor Centrum II Bldg.,150 Valero Street, Salcedo Village, Brgy.Bel-Air,Makati City 1227,Philippines, and email addresses at (SCL) dated 26 October 2023 issued by the Financing and Lending Companies Division (FinLenD) for This resolves the administrative proceedings against Golden Koi Lending Tech Corp. (the under Presidential Decree No.114,financing under Republic Act No.8556,and online lending platforms (OLPs) until the registration of OLPs is permitted under relevant regulations and the corporation has complied with the same; provided however, that borrowings shall be sourced from not more than nineteen (19) lenders, including shareholders, and that there shall be continuing compliance with of Financing Companies (FC) and Lending Companies (LC) and (2 Disclosure Requirements on Advertisements of Financing Companies and Lending Companies and Reporting of Online Lending Platform (MC Nos. 18 and 19, s. 2019, respectively), and such other rules and regulations as may be prescribed by the through fintech-enabled platforms, without however engaging in pawnbroking SEC Memorandum Circulars on (1) Prohibition on Unfair Debt Collection Practices Commission.?" "to engage in the business of direct lending including the provision of services STATEMENT OF FACTS Series of 2021 (SEC MC 10)2,specifically for launching and/or operating an Online Lending Platform (OLP) SEC Memorandum Circular No.19,Series of 2019 (SEC MC 19) and SEC Memorandum Circular No.10 named "Zippeso." On 26 October 2023,FinLenD issued a Show Cause Letter SCL) against Golden Koi for violation of names in violation of Section 2 of SEC MC 19 in relation to SEC Memorandum Circular No.13, Series of 2019. In the said SCL,FinLenD noted that Golden Koi failed to register Zippeso among its business Platforms) prior to commencing the operations of said OLP in violation of Section 3 of SEC MC 19. Golden Koi also failed to file an Affidavit of Compliance (SEC Form 2-Prospective Online Lending Disclosure Requirements on Advertisements of Financing Companies and Lending Companies and Reporting of Online Le Moratorium on New Online Lending Platforms Platforms. Scan the QR to verify the document In re: Golden Koi Lending Tech Corp. Page 2 of 7 moratorium in violation of SEC MC 10. Lastly, Golden Koi launched and operated the Zippeso" OLP despite the imposition of the why it should not be held administratively sanctioned for the violations alleged in the SCL. operations/activities of "Zippesoimmediately remove said OLP from the Google Play Store, Apple Store and other digital platforms,and provide proof of the same,and explain/show cause within ten (10) days In the same SCL, FinLenD ordered Golden Koi to immediately cease and desist the Jeanny Magante, praying for reconsideration of FinLenD's action and assessment against it. On 5 November 2023, Golden Koi submitted its Answer in letter form through its President, Ms. Cybercrime Group (PNP-ACG) and that while their directors and officers were not charged with any crime, it has no practical means to continue its principal operations in whatever form and manner. Golden Koi further added it appears only to be left with no alternative but to completely shut down and dissolve as a body corporate in due course. collection, and customer service operations,following the execution on 20 October 2023 of the search warrants docketed as WSSECD Nos. 23-33770-713.The Respondent added that their equipment and electronic devices were seized and remain in the custody of the Philippine National Police - Anti- Golden Koi stated that it had ceased all of its business operations, including its marketing, debt register its own OLP due to the ongoing moratorium on the recording of new OLPs. lending but is lawfully functioning as the third-party service provider (TPSP) of other licensed lending companies. Golden Koi stated that it has held off any online lending activities while it remains unable to The Respondent also clarified its business operations, stating that it does not conduct any online operations of a lending company is not prohibited under the Lending Company Regulation Act of 20074 (LCRA),Republic Act No.11765 or the Financial Products and Services Consumer Protection Act (FCPA) and/or other implementing rules. It also cited SEC Memorandum Circular No. 185 (SEC MC 18) in stating the SEC's recognition of employing TPSPs as a permissible practice of lending and financing companies. services are incidental to its primary purpose and allowed under Article II(B 3 to 5 of its secondary purposes. Golden Koi likewise underscored that the employment of TPSPs in relation to the outsourcing of It further added that it has instead offered its services as a TPSP to other lending companies whose OLP is owned by it was a completely unintentional lapse on its part and that it has already addressed said matter. Golden Koi manifested that the inadvertent disclosure on the public-facing"Zippeso"OLP that said SEC's lawful orders and regulations fully and undertook full cooperation and coordination with the latter should it be found to have violated the law. The Respondent ultimately expressed its full cognizance and deep commitment to comply with ISSUE Whether Respondent violated SEC MC 19 and SEC MC 10. FINLEND'S RULING must be a verified one, FinLenD rules in the affirmative. Dispensing the technicalities required under the 2016 SEC Rules of Procedure that the Answer Golden Koi operated the Zippeso OLP and implemented by the Philippine National Police - Anti-Cybercrime Group (PNP-ACG). SEC.3-3.Verified Answer to the Formal Charge.-Within fifteen 15 days from receipt of the Formal Charge, the respondent shall file an Answer, which shall either be verified by a statement therein, or by attaching a separate affidavit, which states that the 3The Warrant to Search Seize and Examine ComputerData was issued by Branch 24 of the Regional Trial Court of Manila and applied 4 Republic Act No,9474 5 Prohibition on Unfair Debt Collection Practices of Financing Companies(FC), and Lending Companies(LC) respondenthasread the Formal Charge and that the allegations in the Answer are true and correctof his personal knowledge orbased on authentic records. An answer or affidavit, containing a verification based on"information and belief," or upon bw information and belief, or lacking a proper verification, shall be treated as an unsigned answer. XXX Scan the QR to verify the document In re:Golden Koi Lending Tech Corp. Page 3 of 7 Black's Law Dictionary,it either means the following: and ordinary acceptation and the signification that they have in common use unless it is evident that the meaning, is the performance of a function by exerting power or influence over something or someone. In legislature intended a technical or special legal meaning to those words"7.The term"operate,in its usual Long-established is the rule "that words of a statute would be interpreted in their natural, plain, "1. To run some part of machinery or a business. 3. To perform medical surgery." 2.To function properly must be read in whole, to wit: In the case of Calleja v.Executive Secretary, the Supreme Court has held that provisions of a law "A law must not be read in truncated parts and its provisions must be read in relation to the whole law. Every part of the statute must be interpreted with reference to the context (i.e., that every part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole enactment. Thus, in construing a each and every provision thereof in the light of the general purpose of the statute; and endeavor to make every part effective,harmonious and sensible. statute, courts have to take the thought conveyed by the statute as a whole: construe the constituent parts together; ascertain the legislative intent from the whole act; consider conjunction with SEC MC 19,means the performance of a function by exerting power or influence over an online lending platform. Clearly, the term "operate" as it is commonly understood in connection to the case at bar and in facing"Zippeso"OLP that the same is owned by it was but a completely unintentionallapse on its part. Also despite having addressed the said matter, it can not be denied that individuals who accessed the Zippeso OLP at the time Golden Koi was the stated owner believed the same. FinLenD finds no merit in Golden Koi's manifestation that the inadvertent disclosure on the public Respondent was able to operate it. Golden Koi was able to perform functions that go beyond its claim of simply functioning as a Third-Party Service Provider to other licensed lending companies. Zippeso OLP and inadvertently disclosing in the said OLP that Golden Koi owns it, implies that the It can be deduced that Golden Koi, in having the ability to change the information within the Golden Koi violated SEC MC 19 and SEC MC 10. Respondent's reply of its holding off any online lending for its inability to register its own OLP due to the moratorium and the primary purpose indicated in its Articles of Incorporation, it still finds the Respondent to be violative of SEC MC19 and SEC MC 10. While FinLenD commends Golden Koi's awareness of the existing moratorium,as evidenced by the E Having operated the Zippeso OLP,Golden Koi should have complied with SEC MC 19. submission of the corresponding Affidavit of Compliance, to wit: It is without question that before any OLP's operations commence, the company that will operate it should comply with SEC MC 19.Section 3 of the said circular requires the report shall include, but not be limited to, the following information: Corporate Governance and Finance Department (CGF) of the Commission Platforms, within ten (10) days from the effectivity of this Circular. Said "SECTION 3. Report to the Commission. FCs and LCs shall submit to the an Affidavit of Compliance (SEC Form 1 - Existing Online Lending G.R.Nos.252578,252579,252580,252585,252613,252623,252624,252646,252702,252726,252733,252736,252741 252755, 252759, 252765,252767,252768, 16663,252802,252809,252903,252904,252905,252916,252921, 252984 253018, Republic v.Pryce Corp.Inc.G.R.No.243133,8March 2023 253100,253118,253124,253242,253252,253254,254191&253420,7 December 2021 Retrieved from https//thelawdictionary.org/operate/ 252747 Scan the QR to verify the document In re: Golden Koi Lending Tech Corp. Page 4 of 7 4.Illustrations of the Online Lending Platforms showing how the required 3. Images of the Online Lending Platform/s as they appear to the public; Disclosure and Advisory are displayed. 1.Name of Online Lending Platform/s; 2.Proof of compliance with Section 2 hereof and Online Lending Platforms that are developed, operated, utilized or through an Affidavit of Compliance (SEC Form 2- Prospective Online commencement of the operations of siad Online Lending Platform/s. Lending Platforms), not later than ten (10 days before the amended by LCs and FCs shall likewise be reported to the Commission latter. The mere operation of the Zippeso OLP compelled its compliance with pertinent Form 2) not later than ten (10 days prior to the actual commencement of Zippeso's in having been reflected as the owner of the Zippeso OLP as baseless grounds used by the laws,specifically the filing of an Affidavit of Compliance for its prospective OLPs (SEC FinLenD finds Golden Koi's claims of having only functioned as a TPSP and inadvertence operations. b. Golden Koi violated SEC MC 10 recorded LCs and FCs with OLPs as of 2 November 2021 may operate and be used for place, but SEC MC 10, or the moratorium on the registration of new online lending platforms,had long been implemented. SEC MC 10 expressly provides that only the online lending and financing, to wit: At the time Golden Koi was incorporated on 15 August 2022,not only was SEC MC 19 in regulations, Provided that, this is without prejudice to the outcome of any lending/financing,which shall be subject to strict monitoring by theCommission of their compliance with all applicable laws, rules, and pending administrative actions involving FCs and LCs. "Only the recorded lending and financing companies with OLPs as of 2 November2021 may operateand beused foronline A look at the List of Financing and Lending Companies Registered with the SEC and their Online Lending Platforms as reported pursuant to SEC MC 19,series of 20191 shows that Golden Koi is omitted. Further perusal of the Commission's records provides that of the above-mentioned list Treasure Bowl Fintech Lending Corp.(Treasure Bowl) has disclosed its OLPs, with one named Zippeso, and submitted the Affidavits of Compliance (SEC Form 1 and 2) on 16 September2021. the same Zippeso OLP subject of this case and is among the recorded OLPs with the with recorded OLPs and is hence without authority to operate any OLP for that matter. Moreover, even assuming arguendo that the Zippeso OLP disclosed by Treasure Bowl is Commission as of 2 November 2021,Golden Koi was not included in the list of FCs and LCs Regulations of the LCRA (LCRA IRR) FinLenD finds its mere operation of Zippeso OLP despite not being included on the subject list to be in violation of SECMC10 in relation to Rule 8(cii of the Implementing Rules and P100.00 for each day of continuing violation but such daily fine shall not exceed P50,000.00 for the following io The list can be accessed at https:/www.sec.gov.ph/mc-financing-lending-companies/mc-no-10-s-2021moratorium-or 1 (c Administrative Sanctions - The SEC shall, at its discretion, impose upon any lending company a basic fine of P10,000.00 iv.Unjustified refusal to have its bank of accounts auditedand i.Violation of the Act and its lmplementing Rules and Regulation ii.Violation of the terms and conditions of the Certificate of Authority online-lending-platforms/#gsc.tab=0. Jii.Violation n of any lawful order,decision, or ruling of the Commission Scan the QR to verify the document In reGolden Koi Lending Tech Corp. Page 5 of 7 Golden Koi violated the terms and conditions of the Certificate of Authority to operate as a Lending Company granted to it. instead offered its services as a TPSP to other lending companies, which services are incidental to its primary purpose and allowed under Article II(B 3 to 5 of its secondary purposes, and that said employment of TPSPs in outsourcing the operations of a lending company is not prohibited. regulated money lending industry as demonstrated by its statement that, due to the moratorium,it has FinLenD commends Golden Koi's attitude of being abreast with laws and regulations affecting the FinLenD agrees that the employment of TPSPs in relation to the outsou * cing of operations of a lending company is not prohibited under the LCRA,FCPA,SEC MC 18,and other implementing rules and commends Golden Koi's awareness of the existing moratorium. However, Golden Koi's statements are CA granted to it pursuant to Rule 8(c) of the LCRA IRR. considered admissions that its operation of Zippeso OLP indeed violated the terms and conditions of the The operations contemplated in the CA are traditional lending operations and in no way pertain to providing lending services through an OLP or limiting lending operations to OLPs only. Undoubtedly,the CA granted to Golden Koi gives it the authority to operate as a lending company Incorporation provide for its primary and secondary purposes, among others. The pertinent provisions read: A reading of Article 2A) and Items 3,4,and 5, of Article 2B) of the Respondent's Articles of "ARTICLE 2: A. The primary purpose of this corporation is: To engage in the business of direct lending including the provisions of services through (OLPs) until the registration of OLPs is permitted under relevant regulations and the fintech-enabled platforms,without however engaging in pawnbroking under Presidential Decree No. 114,financing under Republic Act No.8556,and online lending platforms corporation has complied with the same; provided, however, that borrowings shall be shall be continuing compliance with SEC Memorandum Circulars on (1 Prohibition on sourced from not more than nineteen(19 lenders,including shareholders,and,that there respectively), and such other rules and regulations as may be prescribed by the Companies and Reporting of Online Lending Platform MC No.18 and 19, s.2019 Commission. Unfair Debt Collection Practices of Financing Companies(FC) and Lending Companies (LC) and (2 Disclosure Requirements on Advertisements of Financing Companies and Lending B. The secondary purposes of this corporation are the following: XXX transcription,programming, and adaptation of a system software and middleware for commercial and/or research applications, including all aspects of business 3 To provide IT-enabled services encompassing data preparation, encoding process outsourcing activities; (4) To perform,through all reasonable and legally permissible means,collection verification,and/or settlement servi ces in relation unsettled liabilities including but not limited to unpaid and/or overdue amounts,credit receivable,and/or debt related tools, applications, software and instruments; accomplishment of such purposes including utilizing information technology and to do everything suitable, convenient, incidental, and/or proper for the v.Continuous failure to comply with SEC requi urome The penalty of suspension shall be imposed in case of three (3) violations and revocation in seoffour Scan the QR to verify the document In re: Golden Koi Lending Tech Corp. Page 6 of 7 evaluating the credit score of potential customers; 5 Subject to the provisions of the Data Privacy Act of 2012,to gather credit data prepare credit reports, and manage a credit information system for purposes of XXX pertain to those that were able to avail loans from the Respondent. to its primary purpose. However, we disagree with the Respondent's logic that its secondary purposes companies. First, these secondary purposes were incidental to its primary purpose of providing direct in relation to unsettled liabilities in Item 4,and the gathering and management of credit information in Item 5 should be incidental to the loan transactions provided by the Respondent. Second, there is nothing in claimed by Golden Koi. In fact,the clients of Golden Koi,based on the Certificate of Authority to operate as a lending company (CA) granted to it and the primary purpose as stated in its Articles of Incorporation, specified under Items 3, 4,and 5 mean that they can act as third-party service providers to licensed lending lending.Then,the IT-enabled services in Item 3,the performance of collectionverificationand settlement Items 3,4,and 5 that pertains to providing the services to clients or other licensed lending companies,as FinLenD agrees that the secondary purposes of Golden Koi,as reflected in its AOI,were incidental secondary purposes in its AOI had licensed lending companies as their intended clients Golden Koi cannot then detach itself from the violations committed simply by stating that the Golden Koi's admitted to having no lending operations since its inception. which merely rested on bare assertions. The Respondent had presented no evidencei2 enough to substantiate its claim that it only served as a TPSP for other licensed lending companies,such as Treasure Bowl for the Zippeso OLP in this matter. As earlier discussedFinLenD found no merit in Golden Koi's denial for violation of SEC MC 19 companies have disclosed Golden Koi among its list of TPSPs. It is also noted that, based on an Order13 issued by the Commission on 8 June 2023,no lending commence operations within one hundred twenty (120) days from the grant of CA to them, as an excuse for offering their services as a TPSP to other licensed lending companies. The Respondent likewise cited Rule 3e)14 of the LCRA IRR which requires lending companies to relevanti5 in determining whether Golden Koi indeed violated Rule 3(e) of the LCRA IRR and can be held against them. The said admission, expressly stated in the Respondent's letter and signed by their President, is one days from the day it was granted the authority to operate as a lending company to warrant suspension. commence lending operations. It is noted that the above admission was made through their Letter-Answer dated 5 November 2023.FinLenD finds its continuous non-operation one year, two months,and twenty Having been incorporated on 15 August 2022, Golden Koi had until 13 December 2022 to WHEREFORE,in view of the foregoing such amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.(Anonuevo v. CBK Power 2 In la} Sc npany,Ltd.,G.R.No.235534,23 January 2023 and quasi-judicial proce eedings,the quantum of proof necessary is substantial evidence,or Act of 2022(RA No.11765 and its Implementing Rules and Regulations i(e)Commencement of Operation 3 Submission of List of Third-Party Service Providers in Compliance with the Financial Products and Services Consumer Protectior A corporation/company that has been duly registered and granted a Certificate of Authority to Ope commence operations within one hundred twenty(120) days from date of grantof such authority as a Lending Company shall him.Revised Rules on Evidence Failure to co is Section 26. Admission of a party-The act,declaration or omission of a party as to a relevant fact may be given in evi nce operations within said period shall be a ground for the suspension of its CA Scan the QR to verify the document In re: Golden Koi Lending Tech Corp. Page 7 of 7 Pursuant to SEC Memorandum Circular No.19, Golden Koi Lending Tech Corp. is hereby ORDERED TO PAY ONE HUNDRED ELEVEN THOUSAND AND TWO HUNDRED PESOS P111,200.00) within fifteen (15 days from the receipt of this Order. 2. Golden Koi Lending Tech Corp.is hereby ORDERED TO STOP OPERATING AS A THIRD PARTY SERVICE PROVIDER until its Articles of Incorporation stating the said service as its primary purpose is approved by the Commission. 3. For its violation of SEC Memorandum Circular No.10 and Implementing Rules and Regulations of the Lending Company Regulation Act, Golden Koi Lending Tech Corp.is ORDERED TO PAY FIFTY THOUSAND PESOS (P50,000.00) within fifteen (15) days from the receipt of this Order. N In view of Golden Koi Lending Tech Corp.'s violations of the Implementing Rules and Regulations of the Lending Company Regulation Act,its Certificate of Authority to Operate as a Lending Company is hereby SUSPENDED for a period of Sixty (60) Days from the receipt of this Order. 5.Golden Koi Lending Tech Corp. is further directed to b. a Inform the Commission of the date of receipt of this Order Settle in full the fine of One hundred Sixty-One Thousand Two Hundred Pesos d Submit proof of compliance with this Order. Discontinue operations until after the lapse of the suspension period; and P161.200.00) Information & Communications Technology Department for encoding in the CIS-URDB,and all other Departments concerned. Let a copy of this Order be furnished to the Company Registration and Monitoring Department,the SO ORDERED. February 2025.Makati City,Philippines ATTY.KENNETHJOY A.QUIMIO men m OIC-Digector M Scan the QR to verify the document