Xinagasia Marketing Corporation

SECURITIES AND EXCHANGE COMMISSION REPUBLIC OF THE PHILIPPINES Mandaluyong City, Metro Manila SEC Building, EDSA, Greenhills In the Matter of. XINAGASIA CORPORATION MARKETING PROTECTION DEPARTMENT, ENFORCEMENT Petitioner/Movant. & INVESTOR SEC Administrative Case No. 04-14-170 For: Revocation of Corporate Registration with Issuance of a Cease and Desist Order X ORDER against XINAGASIA MARKETING CORPORATION (Xinagasia Marketing), their respective officers, directors, representatives, salesmen, agents and any and all persons claiming and acting for and in their behalf. Cease and Desist Order (Motion for CDO) in the Petition for Revocation of Corporate Registration filed on 28 April 2014 by petitioner/movant Enforcement and Investor Protection Department (EIPD) praying for the issuance of a Cease and Desist Order For the consideration of the Commission En Banc is the Motion for Issuance of commerce on wholesale basis, and engage in or undertake the general management or promotion of product launches, events, exhibits, merchandising, marketing, and investment company, investment house, transfer, commodity/financial futures located at Unit 603-3D Eiffel Building, Chateau Elysee, Dona Soledad Avenue, Better Living, Paranaque City.2 The primary purpose of Xinagasia Marketing is to engage in prohibited it from acting as broker or dealer in securities, government securities eligible are the following: Joselito Del Rosario (Chairman/President), Macaria Leonardo December 2012 with SEC Registration No. CS201223348. Its principal office address is the business of trading and marketing goods, manufactured or unmanufactured commodities, food products, and all kinds of merchandise which are lawful object of promotions of any enterprise similar in nature with the purposes for which this corporation was formed. However, its primary purpose and Certificate of Incorporation dealer (GSED), investment adviser of an investment company, close-end or open-end exchange/broker/merchant, financing company.3 The officers of Xinagasia Marketing Xinagasia Marketing is a corporation duly registered with the Commission on 28 Id., Annex "B" (Third Article of the Articles of Incorporation of Xinagasia Marketing). + Petition, Annex "A" (Certificate of Registration of Xinagasia Marketing). 3 Id., Annex "B (Second Article of the Articles of Incorporation of Xinagasia Marketing). In the matter of Xinagasia Marketing SEC Administrative Case No. 04-14-170 Corporation Page 2 of 6 (Treasurer/Secretary) and Martin G. Junio (Assistant Secretary). Bond Notes" allegedly issued by Xinagasia Lending & Investors Corp. and Xinagasia investments from the public. Mr. Wohlgemuth attached in the said email a printed customers, such as company shares and corporate bonds for investment and offers short, medium and long term investment opportunities, at different rates, with payouts each investigate. The EIPD found an advertisement in said website wherein investment opportunities were being offered to the public, such as bonds described as Cooperate Invest & Trust Bank Corp," which are not registered as a corporation or partnership with the Commission. description of Xinagasia Marketing which offers investment vehicles for its clients or month/quarter. The EIPD went online and into the website of Xinagasia Marketing to alleges that Xinagasia Marketing is one of the corporations being used to solicit According to the EIPD, it received an email from Benjamin Wohlgemuth which Xinagasia Marketing is located. The investigators inquired from the building Marketing. Thereafter, the investigators served a letter on the building administrator requesting for a certification as to whether Xinagasia Marketing is an occupant or tenant of the building, among others. building administrator of Effel Building, Chateau Elysee, where the principal office of The building administrator stated that the Effel Building, Chateau Elysee, is purely residential and that the establishment of offices in the premises is prohibited. Moreover the investigators were also informed that there was nobody inside the unit and there were no signs posted outside the unit to indicate that it is being used as an office by Xinagasia administrator whether or not Xinagasia Marketing is holding office at the said address. On 9 January 2014, investigators of the EIPD proceeded to the office of the business activities. However, on the date of the scheduled conference, nobody appeared. 10 to the directors and officers of Xinagasia Marketing directing them to appear before the Commission on 21 January 2014 to testify on matters regarding its operation and On January 13, 2014, the EIPD issued a Subpoena DucesTecum Ad Testificandum Elysee Condominium Association certifying that Xinagasia Marketing's Macaria On January 23, 2014, the EIPD received a Certificate of Residency from Chateau 8 Id., par. 10 and Annex "E (Certificate of Non-Registration of Company issued by the Company Id., par. 9 and Annex "D" to "D-34" (Website of Xinagasia Marketing). 9.Id., par. 11 to 13, and Annex "F" (Letter of EIPD dated 9 January 2014). 1o Id., pars. 14 and 16. 4 Petition, Annex "C" (General Information Sheet for the year 2013). 5 Id., par. 8. 6 Id. Registration and Monitoring Department on 14 February 2014). In the matter of Xinagasia Marketing Page 3 of 6 SEC Administrative Case No. 04-14-170 Corporation Leonardo is a resident of a unit in the Chateau Elysee Condominium. appearance on the scheduled 21 January 2014 conference was not possible since the subpoena was received only on 23 January 2014.12 On 10 February 2014, the EIPD received a Letter of Ms. Leonardo alleging that February 2014 to testify on matters regarding its operation and business activities. directors and officers of Xinagasia Marketing to appear before the Commission on 21 Again, on the date of the scheduled conference, nobody appeared.14 Another Subpoena DucesTecum Ad Testificandum was issued requiring the records. Paranaque (BPLO-Paranaque) issued a Certification stating that Xinagasia Marketing "HAS NO BUSINESS RECORD ON FILEper verification made with available On 5 February 2014, the Business Permits & Licensing Office of the City of Hence, this instant Motion for CDO. Xinagasia Lending & Investors Corp. and Xinagasia Invest & Trust Bank Corp. by investors and will cause grave or irreparable injury or damage to the investing public. Thus, the EIPD prays that the Commission issue a CDO directing Xinagasia Marketing, persons claiming and acting for and in their behalf from engaging in activities of offering for sale securities in the form of bonds described as "Cooperate Bond Notes". offering the latter's Cooperate Bond Notes" in violation of Section 28 of the Securities Regulation Code (SRC). Moreover, the EIPD argues that such acts operate as a fraud on their respective officers, directors, representatives, salesmen, agents and any and all The EIPD argues that Xinagasia Marketing has acted as a broker/dealer for Section 3.1 of the SRC includes bonds within the definition of "securities", to wit: "SEC. 3.Definition of Terms. - 3.1. Securities are shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character. It includes: Shares of stock, bonds, debentures, notes, evidences of indebtedness, asset- backed securities; x xx" (Emphasis ours) 15Id., par. 21 and Annex "L"(Certificate of BPLO-Paranque). 1 Petition, par. 17 and Annex "H (Certificate of Residency issued on 20 January 2014). 12 Id., par. 18 and Annex "T" (Letter of Macaria J. Leonardo dated 29 January 2014). 13 Id., par. 19 and Annex "K" (Subpoena DucesTecum Ad Testificandum). 14 Id., par. 20. In the matter of Xinagasia Marketing SEC Administrative Case No. 04-14-170 Corporation Page 4 of 6 solicitation or presentation for sale of securities is presumed to be a public offering, as follows: Regulations of the SRC (IRR) provides for the definition of public offering and when a In relation thereto, SRC Rule 3(1)(N) of the Amended Implementing Rules and in general to anyone who will buy, whether solicited or unsolicited. Any solicitation or presentation of securities for sale through any of the following modes shall be presumed to be a public offering: "N. Public Offering means a random or indiscriminate offering of securities jii. Advertisement or announcement in any radio or television, or in any online (Emphasis supplied) or email system; x xx XX X Of securities, to wit: Section 28.1 of the SRC requires the registration of persons engaged in the selling Philippines as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered as such with the Commission." (Emphasis "SEC. 28. Registration of Brokers, Dealers, Salesmen and Associated Persons 28.1.No person shall engage in the business of buying or selling securities in the ours) offering of bonds denominated as "Corporate Bond Notes" issued by Xinagasia Lending & Investors Corp. and Xinagasia Invest & Trust Bank Corp. through the former's advertising in an online system such as its website. Here, Xinagasia Marketing has acted as a broker/dealer with regard to its public will notice the following statements in the "Home" and "Products" pages: When prospective online investors enter the website of Xinagasia Marketing, they Opportunity" 16 "XINAGASIA MARKETING CORP. is your alternative investment and invest where real value is realized from the real econoiny"; ? "Follow the big investors who have recognized the market a long time ago Dollar is trading in Asian currencies, thus halting values decline";18 and "The value of your investment in us depends on the fact that the EUR/US- 'Repayment of investment income and/or capital is converted into the 17 Id., Annex "D-2 ("Products" page of Xinagasia Marketing); and 1 Petition, Annex "D" ("Home" page of Xinagasia Marketing); and http://www.xinagasia.com/index- 18 Id. en.html, last accessed on 5 May 2014. http://www.xinagasia.com/products.html, last accessed on 5 May 2014. In the matter of Xinagasia Marketing SEC Administrative Case No. 04-14-170 Corporation Page 5 of 6 desired currency of the investor at the time of repayment " 1 and "Xinagasia Invest & Trust Bank Corp" pages, they will be able to view the advertisements regarding the bond offering such as the category of bond offered (i.e., Cooperate Bond Note), value of the share, yield, number of interest payments, etc.20 must be noted that the investment products available are Cooperate Bonds Notes" which are located in the "Cooperate Bonds" and "Share Holding tabs of the Bond Notes" from the Products"page to Financing/Shares/SPV's" to Cooperate Bonds or Share Holding and clicking Xinagasia Lending & Investors Corp. or Xinagasia Invest & Trust Bank Corp.In the Xinagasia Lending & Investors Corp. "Financing/Shares/SPV's" tab. The prospective online investors will then view the advertisements of "Corporate pending application for said Certificates of Registration and/or license to act as a broker Investors Corp. and Xinagasia Invest & Trust Bank Corp. through its advertisements in its website such as in the Home",Product" and the Xinagasia Lending & Investors Corp." or Xinagasia Invest & Trust Bank Corppages. Such offering of securities is in Registration and/or license in favor of the Xinagasia Marketing to act as broker/dealer in securities, Dealer in Government Securities, Investment Adviser of an Investment Company, Investment House and Transfer Agent and to sell, offer for sale or distribute securities to the public. Moreover, Xinagasia Marketing has not filed nor is there any Investment Company and to sell, offer for sale or distribute securities to the public.? violation of Section 28 of the SRC since Xinagasia Marketing is not registered with the Commission as a broker/dealer. The Commission has not issued a Certificate of and/or dealer of securities, Dealer in Government Securities, Investment Adviser of an Clearly, Xingasia Marketing is offering securities issued by Xinagasia Lending & a CDO pursuant to Section 64.1 of the SRC. grave or irreparable injury or prejudice to the investing public warranting the issuance of This will clearly operate as a fraud on investors or is otherwise likely to cause IMMEDIATELY CEASE AND DESIST,22 UNDER PAIN OF CONTEMPT, from officers, directors, agents, representatives, conduits, assigns, and any and all persons claiming and acting for and in behalf and under their authority are hereby ordered to WHEREFORE, premises considered, Xinagasia Marketing Corporation, its 20 Id.Annexes"D-4"D-6"D-8"D-10"D-12"D-15"D-17"D-19D-21 and D-23 21 Id., Annexes "N(Certification issued by the Markets and Securities Regulation Department on 3 22 Section 64.1., SRC. The Commission, after proper investigation or verification, motu propio, or upon I Supra, Note 17. (Advertisements of the offer for "Cooperate Bond Notes" by Xinagasia Marketing). February 2013) and N-1 (Memorandum of the Company Registration and Monitoring Department verified complaint by any aggrieved party, may issue a cease and desist order without the necessity of a prior hearing if in its judgment the act or practice, unless restrained, will operate as a fraud on investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public. dated 20 January 2014). In the matter of Xinagasia Marketing SEC Administrative Case No. 04-14-170 Corporation Page 6 of 6 selling securities in the form of, Bonds described as "Cooperate Bond Notes" allegedly issued by Xinagasia Lending & Investors Corp. and Xinagasia Invest & Trust Bank Corp, further acting as a broker/dealer of, and offering, soliciting, or otherwise offering or or any other securities, especially unregistered ones. (a) serve this Order on the President, General Manager, Corporate Secretary, Treasurer or In-House Counsel of Xinagasia Marketing Corporation, (b) post copies of the Order at the entrance of the main office and/or branches, if any, of Xinagasia Marketing Corporation. Let a copy of this Order be also posted in the Commission's website and published in a national newspaper of general circulation. The Enforcement and Investor Protection Department is hereby DIRECTED to: Research and Training Department for their information and appropriate action. Department, the Corporate Governance and Finance Department and the Economic Let a copy of this Order be furnished the Company Registration and Monitoring the lifting thereof within five (5) days from receipt hereof. known as the Securities Regulation Code and Sec. 10-3 of the 2006 Rules of Procedure of the Commission, the parties subject of this Cease and Desist Order may file a request for In accordance with the provisions of Sec. 64.3 of Republic Act 8799, otherwise FAIL NOT UNDER PENALTY OF LAW. SO ORDERED. Mandaluyong City; 22 May 2014. TERESITA J.HERBOSA Chairpersor MA. JUANITA/E. CUETO Ontrmexs latai', ANTONIETA F. IBE Commissioner Commissioner C MANUEL EPHYRO LUIS B.AMATONG Commissioner Commissioner WxA TO B.GAITE