The Court of Appeals (CA) has upheld the order of the Securities and Exchange Commission (SEC) revoking the certificate of incorporation of Kapa-Community Ministry International for its fraudulent investment-taking activities.
In an 18-page decision dated March 11, 2021, the Appeals Court’s Special 16th Division maintained the SEC “validly acquired exclusive jurisdiction over the petition for the revocation of KAPA’s incorporation, heard the petition with due process and subsequently rendered the assailed decision upon solid ground and substantial evidence.”
The commission en banc issued the order of revocation on April 3, 2019 after finding that KAPA had offered and sold securities in the form of investment contracts and in the guise of donations, without the necessary license from the SEC and in a manner resembling a Ponzi scheme, the securities market regulator noted.
The CA in its decision said that the SEC “has established by substantial evidence that (KAPA) was engaged in an unlawful investment activity,” affirming the findings that the supposed solicitation of donations by KAPA actually constituted a public offering of securities in the form of investment contracts.
“As such, KAPA must have registered the investment contracts with the SEC and secured the corresponding permit to offer securities to the public, pursuant to Republic Act No. 8799, or the Securities Regulation Code (SRC),” the court said.
“Pastor Apolinario cannot deny that KAPA is engaged in any solicitation or investment scheme. In one of the investigations of (the SEC), several platforms were used by (KAPA) in social media with Pasto Apolinario excessively talking about KAPA’s investment scheme and how to earn profits from it,” it said
The CAs dismissed KAPA’s claim the SEC defied the temporary restraining order (TRO) from the Regional Trial Court of General Santos City, Branch 35 when it issued the order of revocation while the TRO was in force.
Issued on March 19, 2019, the TRO enjoined the SEC from implementing the cease and desist order (CDO) issued against KAPA earlier on Feb. 14, 2019.
The court said the issuance of the TRO lacked legal basis as this interfered with the Commission’s exercise of powers and duties.
The court also dismissed junked KAPA’s claim the SEC violated its right to due process when it failed to consider the letters it sent prior to the implementation of the revocation order, and when it declared the CDO permanent without hearing KAPA’s side.
“It must be stressed that the SEC decision was not rendered merely to terminate the existence of petitioner as a religious institution but because it committed serious acts of misrepresentation to the prejudice of the general public by soliciting investments in the guise of a donation with a promise of a 30 percent return of profits every month,” the court said.
Following the revocation of its corporate registration, KAPA founder and president Joel Apolinario was arrested in Lingig, Surigao del Sur on July 21, 2020.
An arrest warrant was issued against Apolinario by the Cagayan de Oro City RTC for the non-bailable offense of syndicated estafa.
Other respondents include Junnie G. Apolinario, Maria Pella B. Sevilla, Cristobal R. Barabad, Nonita S. Urbano, Nelia V. Nino, Jouelyn A. Del Castillo, Joji A. Jusay and Albert P. Buhangbuhang.
The Bislig City RTC Branch 29 at the same time issued a separate arrest warrant against Apolinario, together with KAPA Corporate Secretary Reyna L. Apolinario, Trustee Margie A. Danao and promoters Reniones D. Catubigan, Marisol S. Diaz, Adelfa Fernandico and Moises Mopia, for violations of the SRC.
