The Securities and Exchange Commission (SEC) has cancelled the corporate registration of AlphanetWorld Corporation, doing business under the name and style of NWorld, for employing fraud in the procurement of its certificate of incorporation.
In an order dated July 28, the SEC Company Registration and Monitoring Department (CRMD) found that one of NWorld’s incorporators provided an invalid Tax Identification Number (TIN) in the Articles of Incorporation it submitted to the Commission.
“[T]he use of an invalid and false TIN on [NWorld’s] Articles of Incorporation constitutes fraud in the procurement of the certificate of registration, which is a valid ground for the revocation of the Corporation’s Certificate of Incorporation,” the order read.
The CRMD noted that the TIN is an essential requirement in all applications handled by all government agencies, as provided by Executive Order No. 98 dated April 28, 1999. This means that the filing of the articles of incorporation of a company will be disapproved should it fail to provide a valid number.
“Fraud as a ground for the revocation of a Certificate of Registration of a corporation refers to fraud attendant in the registration of the corporation and must be contained and connected with the documents and/or papers presented to the Commission for registration of said corporation,” according to the CRMD.
Prior to the revocation of its corporate registration, the Commission En Banc on February 23, 2022 issued a cease and desist (CDO) against NWorld for its illegal solicitation of investments from the public. The CDO was declared permanent on July 19, 2022.
The SEC issued the CDO against NWorld and its officials, including President Julius Allan C. Nolasco, after finding that the company has been selling and/or offering investment packages priced from P4,750 to P19,000 in exchange for NWorld products and a guaranteed monthly return of up to P127,000. Business transactions were supposedly made through the company’s official webpage.
Member-investors were also promised discounts of up to 30% for every purchase of NWorld products, referral bonuses, and an additional P25,000 when they meet the 25 pairs of recruits.
The scheme involved the sale and offer of securities to the public in the form of investment contracts, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the SEC.
Section 8 of Republic Act No. 8799, or the SRC, provides that securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the SEC.
While NWorld was a duly registered corporation, it had never secured a secondary license from the Commission as issuer of securities or broker dealer nor registered any securities for public offering pursuant to the SRC.
“The evidence presented by NWorld in support of its allegations and arguments therein simply failed to trounce the finding of this Commission that NWorld is engaged in the sale of securities in the form of investment contract, and is in continuous violation of Section 8 of the [Securities Regulation Code],” the Commission En Banc held, as it denied NWorld’s motion to lift the CDO. (News release from the SEC)