In the Matter of All Asia Plans Corp., et al.

May 28, 2009 SEC CASE NO. 02-09-008 IN THE MATTER OF ALL ASIA PLANS CORPORATION, UNITED FARMERS SUGAR CORPORATION, LEGACY EMERGENT ASSET MANAGEMENT, INC., EDIFICE REALTY & DEVELOPMENT CORPORATION, C2MPV REALTY CORPORATION, CALAYUCAY REALTY CORPORATION and R.L. ROA REALTY AND DEVELOPMENT, INC., COMPLIANCE AND ENFORCEMENT DEPARTMENT , petitioner/movant. O R D E R Before us is the Motion dated 30 April 2009 filed on 7 May 2009 by the Compliance and Enforcement Department ("CED", for brevity) of this Commission, for the issuance of a Cease and Desist Order ("CDO") against the following respondent corporations: 1. ALL ASIA PLANS CORPORATION; 2. UNITED FARMERS SUGAR CORPORATION; 3. LEGACY EMERGENT ASSET MANAGEMENT, INC.; 4. EDIFICE REALTY & DEVELOPMENT CORPORATION; 5. C2MPV REALTY CORPORATION; 6. CALAYUCAY REALTY CORPORATION; and 7. R.L. ROA REALTY AND DEVELOPMENT, INC. enjoining said respondent corporations, their directors, officers, salesmen, agents, representatives and any and all persons claiming and acting for and in their behalf, to cease and desist from selling, encumbering, conveying, or disposing any of their properties and other assets without prior written consent from the Commission. On 26 February 2009, the Commission issued a CDO against LEGACY CONSOLIDATED PLANS, INC.; LEGACY CARD, INC., GALAXY REALTY & HOLDINGS, INC., SHINING ARMOR PROPERTY, INC., ONE REALTY CORPORATION, ONE CARD COMPANY, INC., any of their representatives or any person(s) for and in their behalf, and such other persons directing or controlling the activities of such corporations, officers, representatives, salesmen and agents, enjoining them (a) from transacting any and all business involving the funds in its depository banks, and (b) from transferring, disposing, or conveying in any other manner any and all assets, properties, real or personal, including bank deposits and tax credit certificates, if any, of which the named persons therein may have any interest, claim or participation whatsoever, whether directly or indirectly, under their custody, excluding trust funds or assets thereof, immediately upon receipt of the Order, until further order from the Commission. Moreover, subject corporations and any and all of its affiliates, officers, sales agent(s)/salesmen or representatives were also restrained from selling, or offering any and all securities/investment contracts to the public in the absence of the requisite license under the Securities Regulation Code ("SRC") and the Commission's existing rules and regulations. The CDO was anchored on the finding that LEGACY CONSOLIDATED PLANS, INC., through its unlicensed sales agents/salesmen, sold investment contracts to the public without the requisite secondary license. The modus operandi is that the sales agents/salesmen represent the investment products to be safe and secure, offering rates of interest as high as one hundred percent (100%) paid through postdated checks payable on equal monthly and/or quarterly basis, which were actually issued to the investors upon receipt of their investments. Curiously, the complaint-affidavits revealed that while the official receipts given to the investors bear the name LEGACY CONSOLIDATED PLANS, INC., the postdated checks issued to the investors to assure the payment of the maturity value or proceeds of their investments are issued by its affiliate and subsidiary corporations such as LEGACY CARD, INC., GALAXY REALTY & HOLDINGS, INC., SHINING ARMOR PROPERTY, INC., ONE REALTY CORPORATION and ONE CARD COMPANY, INC. Soon thereafter, most of the postdated checks were dishonored because the accounts against which they were drawn were suddenly closed. On 27 February 2009, copies of the above-referred CDO were served on the incorporators, officers, directors, representative salesmen and agents of therein enumerated respondent corporations, and their affiliate corporations, namely, LEGACY CONSOLIDATED ASSETS HOLDINGS, INC., FUSION CAPITAL CORPORATION, LEGACY MOTORS, INC., SCHOLARSHIP PLANS PHILS, INC., CONVENTIONAL REALTY CORPORATION, LEGACY T.D. FUND, INC., LEGACY G.S. FUND, INC., and LEGACY H.Y. FUND, INC. at their respective addresses appearing in their articles of incorporation. On 28 February 2009, the CDO was published in the Philippine Daily Inquirer. The 26 February 2009 CDO was made permanent by the Commission by virtue of its Order of 2 April 2009. Thereafter, based on the other complaint-affidavits it received and the documents annexed thereto consisting of contracts, official receipts, and other pertinent documents issued to investors, the CED discovered that other affiliates and subsidiaries of LEGACY CONSOLIDATED PLANS, INC., namely herein respondents ALL ASIA PLANS CORPORATION, UNITED FARMERS SUGAR CORPORATION, and LEGACY EMERGENT ASSET MANAGEMENT, INC. have likewise received investment and monies from complainant-investors relative to the offer and sale of the various investment opportunities offered by LEGACY CONSOLIDATED PLANS, INC. through its sales agents/salesmen, such as, but not limited to: (1) Double Your Money Program (3-year-plan or 5-year-plan or Legacy Card Rebate Agreement; (2) Mutual Fund; (3) Pre-need Buy-Back with Deed of Assignment; and (4) Maxicore. 1 Notably, as in the previously illustrated case, while the official receipts given to the investors bear the name ALL ASIA PLANS CORPORATION, UNITED FARMERS SUGAR CORPORATION, and LEGACY EMERGENT ASSET MANAGEMENT, INC., the postdated checks issued to the investors to assure the payment of the proceeds of their investments are issued by LEGACY CARD, INC. and GALAXY REALTY & HOLDINGS, INC., both expressly named subjects of the previously issued and made permanent CDO of 26 February 2009. CED alleges that these corporations led the public to believe that they could legally offer and sell investment contracts, assuring them that: (a) their investments were safe, when in fact they were not; (b) their investments would be earning one hundred percent (100%) interest; and (c) their investments would surely be paid because they were issued post dated checks payable in equal monthly/quarterly installments, most of which, however, were dishonored because their underlying accounts were soon closed. According to this Commission's Corporation and Finance Department, ALL ASIA PLANS CORPORATION, UNITED FARMERS SUGAR CORPORATION, and LEGACY EMERGENT ASSET MANAGEMENT, INC. are not registered issuers of securities under Sections 8 and 12 of the SRC and as such are not licensed to offer or issue securities. 2 CED contends that there is an urgent need to preserve the properties and other assets not only of LEGACY CONSOLIDATED PLANS, INC. and its affiliates covered by the 26 February 2009 CDO but also those of herein respondent corporations to prevent them from being dissipated and ensure the return of the investors' claims. Aside from ALL ASIA PLANS CORPORATION, UNITED FARMERS SUGAR CORPORATION, and LEGACY EMERGENT ASSET MANAGEMENT, INC., CED impleaded the other four (4) respondent corporations herein, all realty companies, namely: 1. EDIFICE REALTY & DEVELOPMENT CORPORATION; 2. C2MPV REALTY CORPORATION; 3. CALAYUCAY REALTY CORPORATION; and 4. R.L. ROA REALTY AND DEVELOPMENT, INC. because, per the power point presentation 3 made by Mr. Celso G. De Los Angeles, Jr. before the House of Representatives, they have relations with the companies covered by the 26 February 2009 CDO. ESHAIC From the documents herein filed by CED, it appears that: (a) EDIFICE REALTY & DEVELOPMENT CORPORATION is almost 100% owned by RESOURCE PROVIDERS & MANPOWER SERVICES, INC., 4 a Legacy affiliate as admitted by Mr. De Los Angeles in said power point presentation; (b) C2MPV REALTY CORPORATION is, almost 100% owned by LEGACY CARD, INC.; 5 (c) CALAYUCAY REALTY CORPORATION is almost 98% owned by GALAXY REALTY & HOLDINGS, INC.; 6 and (d) R.L. ROA REALTY AND DEVELOPMENT, INC. is the mother company of FUSION CAPITAL CORPORATION, which is in turn the mother company of LEGACY CONSOLIDATED PLANS, INC. 7 Under Section 64.1 of the SRC, the Commission has the power to issue a CDO if, in its judgment, there is a need to restrain the doing of a particular act to prevent damage or prejudice to the investing public. The provision reads: "SEC. 64. Cease and Desist Order. 64.1. The Commission, after proper investigation or verification, motu proprio , or upon verified complaint by any aggrieved party, may issue a cease and desist order without the necessity of a prior hearing if in its judgment the act or practice, unless restrained, will operate as a fraud on investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public. " The evidence so far presented to us shows that ALL ASIA PLANS CORPORATION, UNITED FARMERS SUGAR CORPORATION, and LEGACY EMERGENT ASSET MANAGEMENT, INC. engaged or involved themselves in the unlawful investment scheme that was the impetus for the CDO issued on 26 February 2009 under Section 64.1 of the SRC. To borrow the words of the Commission in the said CDO, "such acts, unless restrained, will operate as a fraud to investors or will otherwise likely cause grave or irreparable injury or prejudice to the investing public." AcaEDC For this same reason, it behooves the Commission to be consistent and issue a similar CDO against respondents ALL ASIA PLANS CORPORATION, UNITED FARMERS SUGAR CORPORATION, and LEGACY EMERGENT ASSET MANAGEMENT, INC. To better protect the interests of the investing public, this new CDO, we believe, should include EDIFICE REALTY & DEVELOPMENT CORPORATION, C2MPV REALTY CORPORATION and CALAYUCAY REALTY CORPORATION since it appears that they are almost 100% owned, and hence controlled, by corporations covered by the 26 February 2009 CDO. R.L. ROA REALTY AND DEVELOPMENT, INC., on the other hand, can be said to be already covered by the 26 February 2009 CDO because it is a "person directing or controlling the activities of FUSION CAPITAL CORPORATION, and ultimately, LEGACY CONSOLIDATED PLANS, INC.", being the mother company of the latter. WHEREFORE, premises considered, to forestall grave damage and prejudice to all concerned and to ensure the preservation of the assets for the benefit of not only the planholders and investors but the creditors, stockholders and other claimants as well, ALL ASIA PLANS CORPORATION, UNITED FARMERS SUGAR CORPORATION, LEGACY EMERGENT ASSET MANAGEMENT, INC., EDIFICE REALTY & DEVELOPMENT CORPORATION, C2MPV REALTY CORPORATION, CALAYUCAY REALTY CORPORATION and R.L. ROA REALTY AND DEVELOPMENT, INC., or any of their representatives, or any person(s) for and in their behalf, and such other persons directing or controlling the activities of such corporations, officers, representatives, salesmen and agents, are all enjoined (a) from transacting any and all business involving the funds in its depository banks, and (b) from transferring, disposing, or conveying in any other manner any and all assets, properties, real or personal, including bank deposits and tax credit certificates, if any, of which the named persons therein may have any interest, claim or participation whatsoever, whether directly or indirectly, under their custody, excluding trust funds or assets thereof, immediately upon receipt of the Order, until further order from the Commission. SaHIEA Moreover, subject corporations and any of its officers, sales agent(s)/salesmen or representatives are hereby ordered to cease and desist from selling or offering any and all securities/investment contracts to the public in the absence of the requisite license under the SRC and the Commission's existing rules and regulations. All persons against whom this Cease and Desist Order is issued may, within a non-extendible period of five (5) business days from receipt hereof, file with this Commission a formal request or motion to lift the same. Let a copy of this Order be furnished this Commission's Corporation Finance Department (CFD), Non-Traditional Securities and Instruments Department (NTD) and Company Registration and Monitoring Department (CRMD), as well as the depository banks/trustees, the Land Registration Authority (LRA), the Land Transportation Office (LTO), the Bangko Sentral ng Pilipinas (BSP), and the Cooperative Development Authority (CDA), for their appropriate action. CTEacH FAIL NOT UNDER PENALTY OF LAW. SO ORDERED. City of Mandaluyong, May 28, 2009. (SGD.) FE B. BARIN Chairperson MA. JUANITA E. CUETO Commissioner (SGD.) RAUL J. PALABRICA Commissioner (SGD.) THADDEUS E. VENTURANZA Commissioner (SGD.) MANUEL HUBERTO B. GAITE Commissioner Footnotes 1. Annexes "O", and "P" to "W" of the instant Motion. IaESCH 2. Certification of Corporation Finance Department dated 23 March 2009 (Annex "X" of the instant Motion). 3. Annex "Y" of the instant Motion. 4. 2008 General Information Sheet (Annex "E" of the instant Motion). 5. 2008 General Information Sheet (Annex "F" of the instant Motion). TICaEc 6. 2005 General Information Sheet (Annex "G" of the instant Motion). 7. Annex "Y" of the instant Motion.