SEC cancels Robocash Finance Corp license
The Securities and Exchange Commission has stripped Robocash Finance Corp.’s of authority to operate as a financing company for running several branches without license.
The Corporate Governance and Finance Department (CGFD) of the SEC issued the order of revocation on Dec. 12 after establishing that Robocash violated the implementing rules and regulations of Republic Act 8556, or the Financing Company Act of 1998 (FCA).
In the course of its monitoring procedure, the CGFD found that Robocash operated several branches without the requisite Certificate of Authority (CA).
The findings were validated through onsite audits on March 7 and July 5. Robocash also confirmed the same during a hearing on Sept. 20 and through various letters to the SEC.
The CGFD on Nov. 13, issued a formal charge against Robocash and ordered the company to show cause why its CA should not be revoked for violation of the Financing Company Act of 1998.
In its verified answer, Robocash admitted to establishing and operating branches without the necessary CA. The company, however, argued that it did not maliciously violate Section 6(a) of the FCA IRR by putting up branches without the necessary CA.
The CGFD found no merit in the company’s defense, saying, “It may be well to note that respondent was able to secure 32 CAs for 32 separate branches. Thus, it is even more appalling that despite being aware of the requirement of the law, respondent knowingly and willingly committed repeated violations thereof.”
Under Section 14 of the FCA IRR, the SEC may suspend or revoke an erring financing company’s CA after proper notice and hearing. The SEC may also impose a basic fine of not less than P10,000 plus P100 for each day of continuing violation, but no more than P100,000 and other sanctions within its power.
The CGFD initially imposed monetary penalties against Robocash for violation of Section 6(a) of the FCA IRR. The CGDF SEC issued the corresponding orders on payment of penalty on Nov. 5, 6 and 7 for the company’s first, second and third violation of the said rule.
“While it is true that the SEC may impose penalties other than revocation of CA, considering the number of times the respondent knowingly and willingly committed the same violation, the CGDF is constrained to rule that the revocation of respondent’s CA is warranted under the circumstances,” the CGFD noted.
“While the respondent’s goal of catering to the needs of the underserved is laudable, it must always be remembered that compliance with the provisions of the law is foremost. The CGDF will not hesitate to impose the appropriate penalties in cases of violation, even the extreme penalty of revocation of the Certificate of Authority.”
The SEC has revoked the primary registration of 2,081 lending and financing companies without CA, in an ongoing crackdown on illegal lending and financing activities.
The Commission has likewise revoked the CA of two lending companies. Among them is Moola Lending Corporation for violations of Republic Act 3765, or the Truth in Lending Act, and of the terms and conditions of its CA under Republic Act 9474, or the Lending Company Regulation Act, and its IRR.
The SEC also issued cease and desist orders against 48 online lending applications for operating without incorporating and securing CA. More information is available in the Lending and Financing Companies page on the SEC website. – SEC release