In The Matter of Crescent Communication, Inc.

[PED * CASE NO. 94-1745. January 3, 1997.] IN THE MATTER OF CRESCENT COMMUNICATION, INCORPORATED R E S O L U T I O N This pertains to the referral for appropriate action by the Supervision and Monitoring Department to the Prosecution and Enforcement Department. After an audit examination, the former found that the initial paid-up capital in the amount of Two Hundred Fifty Thousand Pesos (P250,000.00) deposited on December 10, 1993 with the Metrobank Commonwealth Branch was withdrawn on January 10, 1994, eight (8) days before the issuance of the Certificate of Registration on January 18, 1994. Such pre-incorporation withdrawal of the mandatory required deposit of initial paid-up capital with a bank, negates existence of any initially subscribed capital and paid-in capital by the original subscribing incorporators. Nevertheless, they pursued registration of Crescent Communication before this Commission. This inconvertible fact as discovered is a clear and outright violation of the mandatory requirement of Section 13 and 14 of B.P. Blg. 68. Under Section 13 and 14 of B.P. Blg. 68, it is a mandatory requirement for the purpose of incorporation that at least twenty-five (25%) percent of the authorized capital stock must be subscribed and that twenty-five (25%) percent of the total subscription must be paid . . . . Violation of such provision will subject the erring incorporators and/or directors for prosecution as provided for under Section 144 of said law. To effect color of compliance with the said provisions of law governing incorporation, the corporation deposited a money evidence by a Certificate of Time Deposit in the amount of Two Hundred Fifty Thousand (P250,000.00) Pesos, with the Metro Bank, Commonwealth Branch, in the name of Rowena F. Adalla, as the Treasurer-In- Trust of CRESCENT COMMUNICATIONS, (INC.),for a period of thirty-five (3 5) days from date of deposit (10 December 93) to due date (14 January 94),supposedly, representing (their) initial paid-in capital required in the process of incorporation. However, upon bank verification by the supervision and Monitoring Department (SMD) conducted on June 6, 1994, the TIT Account was closed on January 10, 1994 or four (4) days before the maturity date of above-described time-deposit which is on January 14, 1994, and (4) days prior to the issuance of the Certificate of Registration by Securities and Exchange Commission. Based on the given facts, per record of the case, the respondent-incorporators therefore culpably committed act(s) violative of the aforecited provisions of law, including the Rules and Regulations being administered and enforced by the Commission and which hereunto mentioned and quoted. "Under Section 3 (A) No. 1 of the Revised Rules and Regulations for Submission/Verification of the Bank Certificate Deposits and Application of Initial Paid-up Capital ,it is also provided that the Commission may after due notice and hearing subject the erring corporation(s) ...any of the following sanctions: A) Suspension or revocation of the registration on the following grounds: xxx xxx xxx 5. That paid-up capital ...was withdrawn prior to the registration of the Articles of Incorporation". By virtue of the apparent irregular procurement of the bank certificate of deposit of Crescent Communication's the erring incorporators effectively succeeded in culpably misrepresenting that they paid and deposited statutorily required initial paid-up capital for the benefit and to the credit of the corporation. Such apparent culpable misrepresentation by the respondent-incorporators, led the Commission to issue its Certificate of Registration. The bank (Metrobank-Commonwealth Branch, thru certain Nathaniel S. Aguilar as Senior Manager and Avella de Ocampo as Account Manager, whose name(s) appeared and signature(s) are affixed in the Certificate of Bank Deposit showing paid-in capital and Certificate of Time Deposit showing time deposit of the amount equivalent to the paid-in capital, appeared to have cooperated to the accomplishment of the fact of corporate registration at issue. The said bank thru its officer(s) issued the Bank Certificate of Deposit of the paid-up capital and allowing its withdrawal despite its Commitment under the second paragraph of the said bank certificate that the face value thereof "may be withdrawn in behalf of said company upon presentation of proof of due incorporation thereof".It is to be noted that the fund was prematurely withdrawn prior to incorporation's. "Relative to this clear breach of bank commitment, Mr. Aguilar was duly served with a subpoena on July 31, 1996 as evidence by a return slip but (he) failed to appear. The above-shown facts as culled together also constitute culpable misrepresentation amounting to fraud in procuring Certificate of Registration sanctionable under P.D. No. 902-A, as amended. Under Section 6 (i) 1 of P.D. 902-A states: To suspend or revoke, after proper notice and hearing the franchise or Certificate of Registration of Corporation ...upon any grounds provided for by law, including the following: 1. Fraud in procuring its Certificate of Registration. xxx xxx xxx WHEREFORE, premises considered, it is hereby ordered that the Certificate of Registration of CRESCENT COMMUNICATIONS, INC. bearing SEC Registration No. ASO94-000412 be REVOKED for violations of Section 13 and 14 of BP Blg. 68, Section (1) 2 of PD 902-A, as amended as well as Section 13 (A) No. 1 of the Revised Rules and Regulations For Submission/Verification of Bank Certificate of Deposits and Application of Initial Paid-Up Capital without prejudice to criminal prosecution of the incorporators for act(s) punishable by the Revised Penal Code; Let copy of this Resolution be furnished the Records Division for delisting of the name of subject corporation, and the Bureau of Internal Revenue for its information. GABRIEL M. MARTINEZ Attorney II Approved: THELMA T. MUNDIN Chief, Prosecution Division