SEC cancels NWorld’s incorporation for fraud
SURIGAO DEL SUR -- The Securities and Exchange Commission (SEC) canceled
the registration of AlphanetWorld Corporation with business name and
style as NWorld for employing fraud in the procurement of its certificate of
incorporation.
An order dated July 28, 2022 the SEC Company Registration and Monitoring
Department (CRMD) discovered that one of NWorld’s incorporators provided an
invalid Tax Identification Number (TIN) in the Articles of Incorporation it
submitted to the Commission.
“The 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 order (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 Securities Regulation Code 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 the issuer of securities or
broker-dealer nor registered any securities for a 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. (Neil Maynard C. Conde, SEC Information
Officer/PIA-Surigao del Sur)
