5 April 2019

SEC REVOKES KAPA’S CERTIFICATE OF INCORPORATION

FOR UNAUTHORIZED INVESTMENT-TAKING SCHEME
The Securities and Exchange Commission (SEC) has revoked the registration of
Kapa-Community Ministry International, Inc. (KAPA) for “serious misrepresentation on
what it can do or is doing to the prejudice and damage of the public.”

In a decision dated April 3, the Commission En Banc granted the petition of the SEC
Enforcement and Investor Protection Department to revoke KAPA’s certificate of
incorporation for offering and selling securities, in the form of investment contracts and
in the guise of donations, without the necessary license and in a manner resembling
a Ponzi scheme.

Under Section 6(i)(2) of Presidential Decree No. 902-A, or SEC Reorganization Act,
the Commission can revoke the certificate of incorporation on the ground of “serious
misrepresentation as to what the corporation can do or is doing to the great prejudice
of or damage to the general public.”

In its decision, the Commission En Banc noted: “Kapa in dealing with the public is
using its registration with the Commission as a religious corporation as a backdrop to
solicit investments from the public knowing that it does not have the requisite
registration. Such act is indicative of Kapa's intent to deceive the public on what it can
do or is doing to the damage and prejudice of the investing public.”

In its certificate of incorporation, KAPA is explicitly prohibited from undertaking

business activities requiring a secondary license such as acting as broker or dealer in
securities, investment house and close-end or open-end investment company.

Despite its lack of authority to offer and sell securities, KAPA recruited and encouraged
members to "donate" any amount in exchange for a 30% monthly return for life, without
having to do anything other than invest and wait for the payout.

Page 1 of 2
Office of the Commission Secretary
S-309, 3F PICC Secretariat Building
Philippine International Convention Center (PICC) Complex
Pasay City
8-888-8141 ; 8-818-5478
The Commission En Banc ruled that such scheme constituted the sale and offer of
securities, in the form of investment contracts, and required a secondary license from
the SEC.

“Kapa misrepresents itself to the public by concealing this investment scheme in the
guise of a donation to entice the public to ‘donating’ when in truth and in fact they are
investing,” the Commission En Banc noted.

“It is by these acts that Kapa's Certificate of Corporate Registration should be revoked
so that it can no longer perpetrate its fraudulent and misleading acts through the
privilege granted to it by the State.”

The Commission En Banc further ruled that such investment-taking scheme was
beyond the powers granted to KAPA by law and those indicated in its articles of
incorporation.

“Performing ultra vires acts especially making it appear to the public that it can perform
investment taking activities in the guise of a donation constitute serious
misrepresentation on what it can do or is doing to the prejudice and damage of the
public,” the Commission En Banc noted.

The SEC earlier issued a cease and desist order against KAPA on February 14. It
subsequently made the order permanent after KAPA failed to file a motion for the lifting
thereof within the prescribed period.

The order covered the partners, officers, directors, agents, representatives and all
other persons acting for and in behalf of KAPA, which also operates as KAPA Kabus
Padatuon (Enrich the Poor), KAPA/ KAPPA (Kabus Padutoon), KAPA-Co
Convenience Store and General Merchandise, and KAPA Worldwide Ministry.
The SEC reiterates its advice for the public to be cautious in dealing with KAPA and
to report to its head office or extension offices any continued investment-taking activity
by KAPA and its allied entities.
Those who have invested money or have been invited to join KAPA may also seek the
assistance of the SEC-Davao City Extension Office at SDC Building, Purok 13, Maa
Road, Maa, Davao City; call (082) 298-2170 and (082) 298-1893; or send an email at
kjpestares@sec.gov.ph. In Cagayan de Oro City, they may visit the Commission at
the SEC Building, corner 14th and Tomasco Del Lara Street; call (088) 857-4325 and
(088) 857-7225; or send an email at rvegypto@sec.gov.ph.

END

Page 2 of 2
Office of the Commission Secretary
S-309, 3F PICC Secretariat Building
Philippine International Convention Center (PICC) Complex
Pasay City
8-888-8141 ; 8-818-5478