Tuesday, January 26, 2016

Davao City warns get-rich-quick companies to follow the law

DAVAO CITY Jan . 26 (PIA)-  The City Government has warned anew quick-rick companies to comply with the rules and policies of the city or face closure.

The city government and other government agencies along with three other multi-level marketing firms met last week where they clarified how they conduct their businesses.

Last January 15, the city government enforced the closure order on multi-level marketing firm Jacama after they misrepresented their nature of business. The business permit indicated the company is into retail but actually its transactions are covered under the definition of investments. It must secure a permit from the Securities and Exchange Commission which the company hasn’t done.

City Administrator Melchor Quitain warned the other companies with the same style of business as Jacama to follow  rules and policies. He declined to name the other MLM companies as they are still under investigation.

Jacama involves members buying retail packages whose prices ranges from P1,800 to P1.8 million. The  profits will be totally encashed after three months. The profit is equivalent to an additional 30% of the money the member paid for the retail package. The SEC in their advisory dated Jan. 16 has defined the transactions as investments.

Citing the case of SEC vs. Santos, where the investor is relatively uninformed and turns over the money to others, essentially depending upon their representations and their honesty and skill in managing it. The transaction is considered to be an investment. (PIA/RG Alama)

No comments:

Post a Comment