HUMANITARIAN AND SPIRITUAL MISSION APOSTULATES OF DAVAO AND ASIA, INC., HASMADAI FOUNDATION, INC., AND HASMADAI INSTITUTE OF TECHNOLOGY CORP.

Securities and Exchange Commission COMMISSION EN BANC Republic of the Philippines Department ot Finance

IN THE MATTER OF:

APOSTULATES OF DAVAO AND HUMANITARIAN SPIRITUAL MISSION AND

ASIA, FOUNDATION, INC. INC. HASMADAI and HASMADAI INSTITUTE OF TECHNOLOGY CORP.

SEC CD0 CASE NO. 05-24-112 Promulgated: 03 December 2024 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT,

Movant. Y b

RESOLUTION

For consideration of the Commission En Banc (the "Commission") is the Verified Motion to Lift Cease and Desist Order ("Motion to Lift") filed by Humanitarian and Spiritual Mission Apostulates of Davao and Asia, Inc. (HASMADAI), through counsel, on 01 July 2024 praying for the lifting of the Cease and Desist Order dated 21 May 2024 (the "'Assailed CDO").

The Assailed CDO directed HASMADAI Foundation, HASMADAI and HASMADAI Institute of Technology Corp. and their agents to immediately cease and desist from engaging in the unlawful/unauthorized solicitation, offer and/or sale of securities in the form of Mission Support or "Charity Mission Support Pledge Form", after the Commission found, based on: substantial evidence, that their investment-taking activities were being carried out in violation of Section 8 of the Securities Regulation Code (SRC). The dispositive portion of the Assailed CDO reads, in part:

Rowel Dagan Bacat, Cyrus Mark Cabasag, Cipriano Qu zon, Jr., LecerioC --oGC Inc., Humanitarian and Spiritual Mission Apostulates of Davao and Asia, Inc., and Humanitarian Institute of Technology Corp., Ralph Jimmy Calaor Gayatin a.k.a. Dante "Bong" Encarnacion "WHEREFORE, premises considered, HASMADAI Foundation, Tabusares

CERTIFIED TRUE COPY OF THE DOCUMENTS ON RECORD PAGE OF PAGES

BY

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al.] In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CD0 Case No. 05-24-112 RESOLUTION Page 2 of 11 Y

any and all persons claiming and/or acting for and in their behalf, are hereby ordered to IMMEDIATELY CEASE AND DESIST from engaging Support or "Charity Mission Support Pledge Form" and 2) any similar approved by the SEC and the corresponding permit to offer/seil securities is issued. A. Lavente, Jr., Duraliza Baja Mahusay, Erwin S. Gabieta, Jeofrie A. Jala, Maria Lourdes Biongan Domosmog, Ledevina M. Generalao, Rodel B. Mahusay, Roy T. Velasco, and their respective officers, directors, in activities of offering for sale of securities in the form of 1) Mission contract that would operate as a direct circumvention of this Order until the requisite registration statement is duly filed with and representatives, salesmen, agents, brokers, dealers, promoters, recruiters, uplines, influencers, endorsers, abettors, and enablers and

investment team planners, mentors, enablers, influencers, assigns, SPIRITUAL MISSION APOSTULATES OF DAVAO AND ASIA, INC., and Jr., Lecerio A. Lavente, Jr., Duraliza Baja Mahusay, Erwin S. Gabieta, Jeofrie A. Jala, Maria Lourdes Biongan Domosmog. Ledevina M. Generalao, Rodel B. Mahusay, and Roy T. Velasco, its officers, operators, administrators, promoters, representatives, conduit entities, subsidiaries, and any and all persons claiming and/or acting for and in their behalf are likewise directed to immediately Commission will institute the appropriate administrative and criminal action against any persons or entities found to act as solicitors, information providers, salesmen, agents, brokers, dealers or the like for and in their behalf. HUMANITARIAN INSTITUTE OF TECHNOLOGY CORP., together with Ralph Jimmy Calaor Gayatin a.k.a. Dante "Bong" Encarnacion Tabusares, Rowel Dagan Bacat, Cyrus Mark Cabasag, Cipriano Quizon, CEASE their internet presence relating to the transactions and investment scheme covered by this Cease and Desist Order. The HASMADAI FOUNDATION, INC., HUMANITARIAN AND salesmen, agents,

agents, investment team planners, mentors, enablers, influencers, assigns, conduit entities, subsidiaries, and any and all persons claiming and/or acting for and in their behalf from transacting any business real or personal, including bank deposits, if any, of which the named INSTITUTE OF TECHNOLOGY CORP., and their respective officers, operators, administrators, promoters, representatives, salesmen, involving funds in its depository banks, and from transferring directly or indirectly, under their custody, to ensure the preservation of the assets of the investors." FOUNDATION, INC., HUMANITARIAN AND SPIRITUAL MISSION APOSTULATES OF DAVAO AND ASIA, INC., and HUMANITARIAN disposing, or conveying in any manner, any and all assets, properties, persons herein may have interest, claim or participation, whether Finally, the Commission hereby PROHIBITS HASMADAI

SEC -- OGC CERTIFIED TRUE COPY OF THE DOCUMENTS ON PECORD

PAGE M C P PAGES

B

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CDO Case No. 05-24-112 RESOLUTION Page 3 of 11

THE RELEVANT FACTS

Office of the General Counsel, a Motion for Issuance of a Cease and Desist On 17 May 2024, the EIPD filed with the Commission, through the

Order (the "Motion for CDO") against HASMADAI.

after finding that HASMADAI is engaged in the unauthorized sale and/or offer of securities in the form of investment contracts. On 22 May 2024, the Commission En Banc issued the Assailed CD0

In its Motion to Lift, HASMADAI primarily maintained that the Mission Support or the amounts received by the corporation are donations and not investments, and as such, cannot be considered as HASMADAI claimed that it is a religious organization, with headquarters "securities" under the contemplation of the SRC. In support thereof,

in Mindanao where pastors from all denominations can preach and receive allowances. It supports its operations from the donations it receives from willing donors, both locally and abroad, and from the profits generated by its shopping centers. HASMADAI alleged that its

humanitarian programs. profits are used solely for the furtherance of its charitable and

Pledge Form (the "Pledge Form") cannot be construed as an investment HASMADAI further maintained that the Charity Mission Support

contract because there is allegedly no provision therein that would lead

programs from which a donor can choose to donate his or her money.1 a reasonable person to expect profits from their donation or pledge. The Pledge Form merely provides for a list of social, spiritual or humanitarian

the same are not allegedly guaranteed, and the amount thereof is not HASMADAI maintained that while it gives Missionary Allowances.

fixed as the same is based on the need of the member/missionary, and subject to the availability of funds of the corporation.2 HASMADAI also maintained that since its doors are open to any faith or denomination, it

every successful recruit. does not need to recruit, or grant the alleged 5% referral commission for

the same was issued in violation of its right to due process. In support HASMADAI also argued that the Assailed CDO should be lifted as

1 Motion to Lift, par.30. 2 Motion to Lift, par.28. CERTFED TRUE COY QF SEC -OGC

THE DOCUMENTS ON RECOE

PAGE PAGES

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CDO Case No. 05-24-112 RESOLUTION Page 4 of 11

be said that it is causing grave and irreparable damage to the investing conducted by the EIPD. Specifically, the EIPD allegedly failed to verify the knowledge and consent. The EIPD also failed to establish that HASMADAI employed fraud in accepting donations and pledges from its supporters public. thereof, it alleged that no proper investigation and verification was authority of its missionary worker Azur Havana (Mr. Havana) who made false representations regarding HASMADAI's business without its or members, considering that it disclosed through its online presence and posts, how the donations that it received were being used. Thus, it cannot

In its Comment3, the EIPD countered with the allegation that it

scheme e.g. pay-in as a "pledge" or "donation" and pay-out as a money with expectation of return/profit.4 investment-taking activities. The EIPD also maintained that the use by HASMADAI of names to describe its unauthorized investment-taking able to secure and submit relevant evidence in support:of its Motion for scheme/transaction has the unmistakable nature of an investment of conducted the requisite investigation/surveillance operations, and was CDO, which proved that HASMADAI is engaged in unauthorized 'missionary allowance", did: not negate the fact that such

The EIPD further argued that although HASMADAI questioned the authority of Mr. Havana to issue'statements with regard to its business, HASMADAI did not dispute tha member/missionary worker As such, Azur Havana's state C should be given full credence and probative value based HOA and information and his own personal knowledge ued that HASMADAI's reliance on the con exculpate it from liability because oth Ar. Tabusares admission during the Comn Francisco, Agusar C missionary allowances iniang Bayan of San

to donors, the Affidavit of a F vestor, the results of surveillance operations, which all of which proved the unauthorized investment scheme of HASMADAI.

The EIPD posited that the fact that Respondents made it appear

support" undoubtedly indicate the fraudulent intent of HASMADAI to that the investments solicited from the public were "pledges" or "mission

Dated 30 July 2024 4 Comment par.12. CERTFIED ERUT COY ON SEC -OGC

THE DOCUMENTS TIN RRCORE

PAG IAGES

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CD0 Case No. 05-24-112 RESOLUTION Page 5 of 11

mislead the public.5 The EIPD stressed that HASMADAI has no viable

corporation, it should not even engage in the business of operating "shopping stores"7 where the generation of profits is the main or underlying purpose. from the donation/investment of its donors/members. Being a non-stock business or enterprise from which the huge promised profits or so-called income of more than 27% to 34% return were being derived from aside

On 29 August 2024, the EIPD filed its Position Paper where it reiterated the allegations in its Comment.

On 10 October 2024, HASMADAI filed its Position Paper where in addition to its previous allegations and arguments, it alleged that there were people who did not give donations or pledges and yet were able to

gains more than what he has donated, as alleged by the EIPD. No receive missionary allowances. Moreover, there: is no proof that HASMADAI offers a "Benefactor-Beneficiary" scheme whereby a donor

promises were made to donor TrA than the blessing of knowing that every donation is given to those Further, Mr. Tabusares, from the excerpts from the Committee allowance is guaranteed for did not state that the missionary a made to HASMADAI. Mr Tabusares merely stated that dono ceive blessings or missionary living allowances and that "blessings" may be construed to mean not only financial blessings but can as mean spiritual, emotional or other physical blessings such as health and wellness.

forms in many known catholic denominations which also guarantee blessings in exchange for giving tithes to the church. There is nothing unlawful in the collection of donations and pledges by HASMADAI since HASMADAI further claimed that its Pledge Form follows the tithing

which is one of its primary purposes in its AOf. the main purpose of such collection is to engage in, operate and maintain the work of evangelism, apostolate and humanitarian missionary works,

ISSUE

5 Comment, par.20. 6 Comment, par.31. 7 Comment, par.32. ARTFE SEC -DGC TECYr

THE DOCUMENTS ON RECORD PAG 5 C PAGRS

B

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CD0 Case No. 05-24-112 RESOLUTION Page 6 of 11

Whether HASMADAI presented sufficient grounds in its Motion

to Lift to warrant the issuance of an order lifting the Assailed CDO.

DISCUSSION

We deny the Motion to Lift for being bereft of merit and basis.

HASMADAI was not denied of its right to due process.

HASMADAI maintains that it was denied of due process because it was allegedly not afforded the opportunity to controvert the pieces of evidence presented by the EIPD, and it was not able to participate in the EIPD's investigation which deprived it of the opportunity to identity and confront.the persons questioned during surveillance.

We do not agree with HASMADAI.

investigation or complaint filed in relation.to an act/transaction that may Sec. 64.2 of the SRC categorically mandates and classifies any

warrant the issuance of a CDO as confidential, to wit:

filed. including the contents of the complaint. shall be confidential. Upon issuance of a cease and desist order, the supplied} an investigation has been initiated or that a complaint has been Commission shall make public such order and a copy thereof shall be immediately furnished to each person subject to the order." (Emphasis Until the Commission issue a cease and desist order the fact that

persons involved, for the protection of the investing public. This finds promptly acts on the matter, and exercises the appropriate regulatory support in the case of "Primanila Plans, Inc. v. Securities and Exchange complaint filed be kept confidential is to ensure that the Commission action, unhampered by dilatoryschemres which may-be employed by the Commission,8 where the Supreme Court sustained the validity of the The purpose of the law in.requiring that the investigation or

investigation notwithstanding the fact that the subject(s) thereof did not participate in the same, thus:

G.R. No. 193791, August 6, 2014, 732 SCRA 264. CERTIFIED TRUE COPY OF SEC --OGC

THE DOCUMENTS ON RECORD

FAGE D PAGRS

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CDO Case No. 05-24-112 RESOLUTION Page 7 of 11

investigation conducted by the Commission prior to the cease and desist order's issuance. Given the circumstances, it was sufficient for given the reasonable opportunity to present its defense: Primanila not necessary to comply with the requirements of due process. Its essence is simply the opportunity to explain one's position." (Emphasis the satisfaction of the demands of due process that the company was amply apprised of the results of the SEc investigation, and then was able to do this via its motion to reconsider and lift the cease and desist order. After the CED filed its comment on the motion Primanila was further given the chance to explain its side to the SEC through the filing of its reply. "Trite to-state, a formal trial or hearing is supplied) "The SEC was not mandated to allow Primanila to participate in the

its right to due process since it was not involved in the investigation conducted by the EIPD is bereft of legal basis. On the basis thereof, HASMADAI's contention that it was denied of

Be that as it may, this Commission is cognizant of the right of

accorded to respondent, there can be no denial of due process.9 jurisprudence, consists of the opportunity to present their defense(s) opportunity to be heard, either through oral arguments or pleadings, is and/or seek reconsideration of the questioned action or decision, both of fundamental requirement of due process or the right to be heard is satisfied if respondent is given the opportunity to explain his/her side, or the opportunity to seek reconsideration of the action/ruling that is being which are available to them after the CDO is issued. In this regard, it bears emphasis that in administrative proceedings such as the instant case, the assailed. Hence, where the notice requirement is complied with and the persons or entities subject of a CDO to due process, which under law and

given due course' notwithstanding its belated filing negates its allegation that it was denied due process. In the instant case, the fact that HASMADAI's Motion to Lift was

finding of fraud were not complied with, this Commission finds the same to be devoid of factual basis. Sec. 64.2 of the SRC relating to the conduct of proper investigation, and Anent HASMADAI's allegation that the requisites prescribed under

9 Vivo v. Philippine Amusement and Gaming Corporation, G.R. No. 187854, November 12, 2013. THE DOCUMENTE ON RECORD CERTFIED TRUE COPY OR SEC -OGC

PAGE 4

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CDO Case No. 05-24-112 RESOLUTION Page 8 of 11

investigation and submitted reports and document which supported the conclusion made by this Commission that the unauthorized investment- taking activities of HASMADAI violated the SRC and constituted fraud which warranted the issuance of the Assailed CDO to prevent grave and irreparable damage to the investing public. The evidence on record shows that the EIPD conducted a formal

HASMADAI is engaged in the unauthorized sale and/or offer of securities in the form of investment contracts without the 'required license.

or "mission allowance" ranging from 27% to 34% of the money the form of investment contracts which was masked as a "donation" Form to cover the amount of pledge/investment with a promise of return pledged/invested is clearly an investment contract, the offer/sale of which, requires a license from the Commission. finding that HASMADAI was selling/offering unregistered securities in without the required license. HASMADAI's scheme of issuing a Pledge The issuance of the Assailed CDO was based on the Commission's

finding that it is engaged'in the sale/offer of unregistered securities to the public in the form of investment contracts. HASMADAI's Motion to Lift failed to controvert the Commission's

formal investigation and presented substantial evidence in support of its Motion for CDO consisting of the Certifications from the CRMD, CGFD and MSRD, Field Investigation Reports of the investigation; Affidavit of the As extensively discussed in the Assailed CDO, the EIPD conducted a

branches, photos of the sample Pledge Form, and the photos of and screenshots of the Facebook postings, among others. Investigator who invested with HASMADAI; photos of HASMADAI

The slide presentation prepared by Mr. Havana, a

investment contract which violates Sections 8 and.28.of the SRC. -'o0c specific amount of donation/support, constitutes substantial evidence showing that HASMADAI's unauthorized investment-taking scheme involves the sale/offer .of unregistered securities...in_.the...form...of donations/supports received, and the corresponding allowance for a member/missionary worker of HASMADAI, which showed a table of

THE DCCUMENTE ON RECORD CERTEED TEUE COPY OF

PAGE 4 PEGRS

Y

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CDO Case No. 05-24-112 RESOLUTION Page 9 of 11

representations made by Mr. Havana deserves to be given full credence. made the representations about the investment-taking activities of Mr. Havana was acting in his capacity as a missionary worker when he The Commission thus agrees with the EIPD that the

by HASMADAI, his representations about HASMADAI.are based on his HASMADAI. Being a missionary worker of HASMADAI, afact confirmed

personal knowledge and thus, should bind HASMADAI. The slide presentation of Mr. Havana reinforces the finding of the Commission form of investment contracts without the required license. that HASMADAI is engaged in the sale of unregistered securities in the

not all of the elements of the Howey Test are present to be bereft of merit by any evidence will not suffice to negate the evidence presented by the and basis. The bare allegations proffered by HASMADAI unsubstantiated EIPD which showed otherwise. In People v. Bagaua1o the Supreme Court In a similar vein, this Commission finds HASAMDAI's argument that

ruled that "it is well-settled that denial, if unsubstantiated by clear and convincing evidence is a negative self-serving assertion that deserves no weight in law."

argument that there is no investment contract as'the pledges are not investments but donations. The Commission cannot also give credence to HASMADAI's

Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.11 When

the plain gratuity of the donor because such person is not expecting a person donates money, the primary consideration is the liberality or anything in return. Generally, it is considered as a one-sided transaction because the donation was given unconditionally.

liberality, but because of the promised "missionary allowance" ranging When one gives something to another with the expectation of a return. from 27% to 34% of the money pledged which they will be receiving. the same is no longer a donation. Hence, the use of the term "donation' HASMADAI's members are: "donating" not out of gratuity or

by HASMADI does not operate to negate the fact that the unauthorized

10 G.R. No. 147943, December 12, 2002, 442 PHIL 245-257. 11 Art. 725, NCC CERTIFIED TTUE COPY OF SEC -OGC

THE DOEUMENTS ON EECORD

PAGT PAGHS

9

C

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CDO Case No. 05-24-112 RESOLUTION Page 10 of 11

investment scheme which it is carrying out consists of selling/offering unregistered securities in the form of investment contract.

nature of an investment contract, thus: The US case of SEC v. Bailey12 is instructive in determining the

discover the real nature of the transaction. Labels affixed by the parties are of little moment." (Emphasis supplied) income-producing venture, membership in which is secured through appraising contracts for the purpose of determining the applicability of the statute, courts readily look through the form to affects, not ordinary land sale contracts, but "investment contracts" which evidence primarily a right to participate in the proceeds of an entrusting an investor's capital to the management of others. In "The Securities Act is remedial in nature, to be liberally construed. It

In an investment contract, the form is disregarded for substance

means a contract or scheme for "the placing of capital or laying out of money in a way intended to secure income or profit from its discussed in the Assailed CDO, and'no evidence was presented by HASMADAI to the contrary, this Commission will no longer reiterate the same. and emphasis is placed upon economic reality. An investment contract employment."13 Moreover, considering that this matter has been fully

On the basis of the foregoing disquisitions, the Commission does not find any cogent reason that warrants the setting aside of the Assailed CDO.

Cease and Desist Order filed by Humanitarian and Spiritual Mission Apostulates.of Davao and Asia, Inc. (HASMADAI) is hereby DENIED for WHEREFORE, premises considered, the Verified Motion to Lift

representatives, salesmen, agents, brokers, dealers, promoters, recruiters, uplines, influencers, endorsers, abettors, and 'enablers and any and all persons, conduit entities, subsidiaries and affiliates, is hereby made PERMANENT. Institute of Technology Corp. their respective officers, directors, lack of merit. The Cease and Desist Order dated 21 May 2024 issued against HASMADAI Foundation, Inc., HASMADAI, and Humanitarian

12 41 F. Supp. 647, 650 (S.D. Fla 13 State v. Gopher Tire & Rubber Co.; 177 N.W. 937,938 (1920) THE DOCUMENYS ON EECORD CERTFIED TRUECOFYDE SEC - OGC

PAGEJD O8 PAGHS

B

APOSTULATES OF DAVAO AND ASIA, INC. (HASMADAI), et al. In the Matter of: HUMANITARIAN AND SPIRITUAL MISSION SEC CDO Case No. 05-24-112 RESOLUTION Page 11 of 11

Manager, Corporate Secretary, Treasurer or In-House Counsel of DIRECTED to: (a) serve this RESOLUTION to the President, General HASMADAI Foundation, Inc., HASMADAI, and Humanitarian Institute The Enforcement and Investor Protection Department is hereby

of Technology Corp.; and (b) post copies of the RESOLUTION at the entrance of the main offices and/or branches, if any, of HASMADAI

Technology Corp.. Foundation, Inc., HASMADAI, and Humanitarian Institute of

website and furnished to all operating departments and offices of the Let a copy of this RESOLUTION be also posted on the Commission's

Commission for their information and appropriate action.

to file a compliance with the Commission En Banc within ten (10) days from receipt of this RESOLUTION coordination with other concerned departments, is FURTHER DIRECTED The Enforcement and Investor Protection Departrnent, in

SO ORDERED.

Makati City, Philippines

EMILIO B.AQUINO

Chairperson

JAVEY/PAUL D. FRANCISCO KARLC S. BELLO

Commissioner Commissioner

MCJfLL BRYANT T.FERNANDEZ Commissioner ROGELIO V. QUEVEDO Commissioner

SEC OGC CERTFLED TTUE COPY OF THE DOCUMENTE CN RECORD

PAGE 0 C 1 PAGES

SECURITIES AND EXCHANGE COMMISSION SEC HEADQUARTERS,7907 Makati Avenue Salcedo Village, Bel-air, Makati City Republic of the Philippines Derem Dar DATE 6 20U

consisting of Blevp IHEREBY CERTIFY that the foregong is a true (s) thereof in the custody of and correct xerox reproduction of fhe official fle JEC CAO OE (") pages, pertaining to 24-1 this Commission

Verified By: OR No. SEC Administrative Officer IV GIPSY C. DAYAON Fees: Dated Paid under