MMG International Holdings Co., Ltd.

SECURITIES & EXCHANGE COMMISSION REPUBLIC OF THE PHILIPPINES DEPARTMENT OF FINANCE Mandaluyong City, Metro Manila SEC Building, EDSA, Greenhills IN THE MATTER OF MMG INTERNATIONAL HOLDINGS CO., LTD. CED CASE NO. 01-2646 CEASE AND DESIST ORDER paying monthly yields on their investments. And Desist Order (the Amended Motion) filed by the movant Compliance and Enforcement Department against a registered partnership identified as MMG International Holdings Co., Ltd. (MMG for brevity). A copy of said Amended Motion is marked as Annex A and made an integral part of this Order. The aforesaid Amended Motion essentially alleges that MMG openly solicits and issues securities through the form of Memorandum of Agreements (MOAs) which in iurn promises investors high Before this Commission is an Amended Motion For The Issuance of A Cease May 25, 2000 for similar alieged violations only to get lifted on July 17, 2000 on the ground that the number of four (4) investors is well within the allowable number of ten (10) primary lenders under Section 4(f) of the New Rules on Registration of Short-Term Commercial Papers. A previous Cease and Desist Order (CDO) had been issued against MMG on is whether or not there are reasonable grounds to find that MMG offered and soid unregistered securities after the period covered by the previous CDO. Now the primordial issue to be considered in issuing this Gease and Desist Order Enforcement Department to their Amended Motion, the following findings can reasonably After looking at the relevant pieces of evidence annexed by the Compliance and be ascertained to wit: MMG is soliciting investments as evidenced by a flier/letter Terwel1 marked as Annex D in CED's Amended Motion which in brief promises a thirty six percent annual return for a minimum investment of 'Php 50,000; circulated to the pubiic by MMG's Marketing Officer named Resaiie 2 There is presently open solicitation of MMG's MOAs as shown by an Memo from the lioilo extension office dated Nov. 14, 2001 states Iegitimacy of MMG's solicitation to invest money, marked as Annex email from one Ma. Lucille Zamora to the SEC inquiring about the E in the Amended Motion. Likewise, to buttress this finding, a Paragraph 17 of Amended Motion. ' Confirmed to be ar MMG employee as per the representation of MMG's counsel Atty. Ricablanca, C/. MMG's business2: that it receives numerous phone calls inquiring about the legality of 3 Despite MMG's representation in their letter dated December 3. to the present group of SEC investigators. Aforesaid MOA was 20013 to this Commission that they no longer issue MOAs, there identical to the ones admittedly issued by MMG previously: remains to be issuance thereof as proven by a MOA* sent by Mr. 2001 to January 31, 2002. The investor's name was removed by request, but the same is signed by MMG's President Ervin Y. Mateo and notarized by a certain Atty. Baarde, the same iawyer who talked Armando Villaruz of SEC-lloilo with an effective date of July 31] 4 To finaily deduce that there is indiscriminate offering/solicitation of unregistered securities, SEC's Mr. Leo Arugay and Ms. Carina Bisquerra posed as potential investors and went to one of its 29. 2002. There they met one Tina Lapid who introduced herself as the SEC investigators/poseurs that there are thousands of investors and many more are still coming marketing offices in Cityland Building, Herrera Towers on January one of the marketing sales assistant of MMG. Among the numerous documents shown was a letter proposal that alluded to a MOA signed by Ms. Grace Petil, MMG's Area Manager. Aforesaid letter inciudes rates of return to possible investors. Ms. Lapid informed solicitations/offers and sale of the MOAs, despite MMGs blanket denials. While this Commission acknowledges the letter dated March 18, 2002 by MMG's Treasurer, Evelyn E. Mateo, stating that a previous CDO had been previously lifted, the period covered by this CDO is different. It must likewise be stressed that the rules allow the Compliance and Enforcement Department to do motu proprio investigations without need of a complaint from investors. In sum, there are reasonable grounds to show that there presently are open Pursuant to Section 8. 1 of the Securities Regulation Code that states that: Prior to such sale, information on the securities, in such form and such substance as the Commission may buyers. (Underscoring ours) distribution within the Philippines, without a registration statement duly filed and approved by the Commission. prescribe, shall be made available to each prospective Securities shall not be sold or offered for sale or 2 See Annex P of CED's Amended Motion. See Annex I, iderm. $ See Paragraph 12, idem. See Annex Q, idem. 8 See paragraph 25, idem. 4 See Annex P-2, idem. See Arnex P-3, idem. appears to be reasonably filed. and Article 3, Rule I, Part 3 of SEC Circuiar No. 4, Series of 2001 the present Motion issuing. negotiating, distributing or otherwise dealing in securities using the officers, partners, representatives, agents and any and all persons acting for and/or in its behalf are hereby directed to cease and desist from further offering, soliciting. Memorandum of Agreement or other instruments in order to avert or prevent grave or irreparable injury to the investing public by its continued operations. WHEREFORE, premises considered, MMG International Holding Co. Ltd., its cause why this CDO should not be made permanent. of five (5) days from receipt hereof. In the same request, MMG is directed to show MMG may file for a formal request to lift this CDO within a non-extendibie period consider a settlement offer for the aforementioned infractions. Pursuant to Section 55 of the Securities Regulation Code this Commission may Circular No. 4, Series of 2001 if it finds the same convenient. MMG likewise has the option to choose Rule of Summary Procedures under SEC SO ORDERED. Mandaluyong City, Metro Manila. April 1, 2002. Lilia R. BAut IS1A Chairman Fe eLoisa c. Gloria Commissioner EDI4ER A. MARTINEZ /Commissioner *JOSELIA J. POBLADOR Commissioner * MA. JuAnita E. CuetO Commissioner *on leave 2/amo alsk 12