Issue of September 12, 2021
Mt. Province

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SEC prevents operation of lending company for fraud
by Press release

The Securities and Exchange Commission has ordered R.L. Aggregates and Diversified Lending Group, Inc. to stop soliciting investments from the public through a fraudulent scheme that involves the use of falsified registration documents.

In an order issued July 27, the SEC ordered R.L. Aggregates to immediately cease and desist from engaging in the unauthorized solicitation, offer, and/or sale of securities in the form of investment contracts until the requisite registration statement is duly filed with and approved by the Commission.

The SEC further enjoined the company to cease its Internet presence relating to the transactions and investment scheme covered by the order.

The order extends to R.L. Aggregates’ directors, namely Roberto S. Llorente, Jennylyn M. Clemente, Patricio B. De Villa, Carlo S. Mamaril and Alvin C. Camanero, its operators, officers, representatives, salesmen, agents including Ashley Reyes, Maya Gonzalez, Randy Dela Cruz and Kenneth Daniel Papa, and any and all persons claiming, acting, and operating for and in their behalf.

The SEC issued the order after finding that R.L. Aggregates has been enticing the public to invest in the company in exchange for guaranteed returns of one percent per day or 30 percent per month over a lock-in period of three months.

The scheme requires potential investors to invest or deposit an amount ranging from P1,000 to P500,000, with dividends to be paid out every 15th and 30th of the month.

With this, an investor with a capital of P1,000 will supposedly earn P150 every 15 days, or P1,900 after three months. Over the same period, those who invest P500,000 would receive P950,000.

The scheme involves 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 8799, or The Securities Regulation Code (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.

R.L. Aggregates is registered with the Commission and holds a Certificate of Authority to operate as a lending company. However, it has never secured a secondary license to solicit investments from the public, as required under Sections 8 and 12 of the SRC.

An investigation by the SEC Enforcement and Investor Protection Department (EIPD) revealed that R.L. Aggregates has been using an altered and falsified copy of its Articles of Incorporation (AoI), stating that “the corporation shall direct solicit, accept or take investments/placements from the public and shall issue investment contracts.”

The EIPD also found that R.L. Aggregates falsely declared it is a mother company of cooperative and lending groups that caters to agriculture, small businesses and small-scale mining in Masbate.

Section 26 of the SRC prohibits fraudulent transactions relating to the purchase or sale of securities such as the employment of any device, scheme, or artifice to defraud and the engagement in any act, transaction, practice or course of business which operates or would operate as a fraud or deceit upon any person.

The Commission further noted that R.L. Aggregates’ authorized capitalization was only P1.5 million, which would make its business model “not sustainable and will likely cause grave or irreparable injury or prejudice to the investing public.”

The Commission warned the public against investing in R.L. Aggregates and other entities engaged in unauthorized investment-taking activities as early as Feb. 23 through an advisory.

Several complaints and inquiries from the public were subsequently received by the SEC, including 21 complaint-affidavits filed with the EIPD on March 26.

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