Dalangpan Sang Amon Utod Kag Kasimanwa Foundation, Inc.

September 12, 2014 SEC CRMD CASE NO. 14-558 DALANGPAN SANG AMON UTOD KAG KASIMANWA FOUNDATION, INC. SEC Registration No. CN200806262 FOR : Revocation of Certificate of Registration ORDER Before the Company Registration and Monitoring Department (CRMD) are the respective recommendations of the Enforcement and Investor Protection Department (EIPD) and Corporate Governance and Finance Department (CGFD) of this Commission for revocation of the certificate of registration of DALANGPAN SANG AMON UTOD KAG KASIMANWA FOUNDATION, INC. DALANGPAN SANG AMON UTOD KAG KASIMANWA FOUNDATION INC. ("subject corporation") is a non-stock corporation registered on April 25, 2008 under SEC Registration No. CN200806262. Based on its articles of incorporation, the purposes for which it was established are as follows: "1. To promote and support social and economic development in the countryside through the implementation, initiation and/or execution of livelihood, income-generating and social development programs and projects; 2. To support and assist national development programs through the extension of financial, technical and other relevant assistance; 3. To encourage the members and the community to undertake the proper and efficient utilization of local resources in development activities; CcADHI 4. To develop, harness and promote the people's participation in every socio-economic activity towards the development and progress of the community; 5. To acquire loans and other financial accommodations from the government and other financial institutions in order to finance productive socio-economic activities; 6. To receive grants, donations, contributions, legacies and other forms of financial assistance in order to carry out its primary purposes satisfactorily and effectively; 7. To enter into lawful contracts that may be necessary or incidental to the conduct of its business; 8. To coordinate, cooperate and work with government and non-government agencies and entities in the promotion and delivery of services to the community." The incorporators of subject corporation are as follows: Name Declared Tax Identification Number (1) Jesus Castillo 239-274-258-000 (2) Rodina Jalandoon 934-889-557-000 (3) Rodelyn Flores 257-665-194-000 (4) Marilou Tumandao 185-649-940-000 (5) Floriceta Bargola 257-665-482-000 The principal office of subject corporation is located at 24-F Carlos Street, Howard, Baesa, Quezon City, as indicated in its 2012 General Information Sheet, received by the Commission on August 17, 2012. As part of their surveillance and investigation functions, EIPD of this Commission requested the Bureau of Internal Revenue ("BIR") for verification of the authenticity of the Tax Identification Numbers ("TINs") of the incorporators of subject corporation as declared in its articles of incorporation. In a letter-certification dated March 4, 2014, BIR, through Commissioner Kim S. Jacinto-Henares, confirmed that Marilou Tumandao has not been issued any TIN. Based on their records, TIN 185-649-940-000, purportedly issued to her, as stated in the articles of incorporation of subject corporation, does not belong to said Ms. Tumandao. Thus, the request of EIPD to CRMD for the revocation of the certificate of registration of subject corporation. Acting on the matter, CRMD sent summons to subject corporation in its reported principal office address, copies furnished its president, Mr. Renato S. Ornopia, and Ms. Tumandao herself, directing the same to file its answer or comment to the information gathered by EIPD from BIR within fifteen (15) days from receipt thereof. IaEACT After the lapse of the reglementary period given to subject corporation to file its answer or comment, the summons still remains unheeded. On July 24, 2014, CRMD received a memorandum from CGFD, the operating department of this Commission which has jurisdiction over the monitoring of the compliance of foundations with their reportorial requirements, likewise recommending the revocation of the certificate of registration of subject corporation on the ground of non-filing of the following reports: Requirements Not Filed Filed Late General Information Sheet 2008, 2013-2014 2011-2012 Audited Financial Statements 2010-2013 Sworn Statement of Sources and Application of 2008-2013 Funds and Certificates of Existence of Accomplished Projects Hence, the instant case. The sole issue to be resolved is: ADaECI "Whether or not this Commission should revoke the corporate registration of DALANGPAN SANG AMON UTOD KAG KASIMANWA FOUNDATION INC. on the ground of fraud in procuring its certificate of incorporation and non-compliance with the reportorial requirements of this Commission." The answer is in the affirmative. Discussions I. There was fraud in the procurement of the certificate of registration of subject corporation Incorporation is a mere privilege granted by the state. Thus, in order to enjoy such privilege, the requirements and procedures for the grant thereof must be strictly complied with. Section 10 of the Corporation Code provides that any number of natural persons not less than five (5) but not more than fifteen (15), all of legal age and a majority of whom are residents of the Philippines, may form a private corporation for any lawful purpose or purposes. Each of the incorporators of a stock corporation must own or be a subscriber to at least one (1) share of the capital stock of the corporation. One of the most important statutory requirements for the incorporators is to specify their names in the articles of incorporation, to sign thereon and to acknowledge the same before a notary public. Section 14 of the same Code, thus, states: "All corporations organized under this code shall file with the Securities and Exchange Commission articles of incorporation in any of the official languages duly signed and acknowledged by all of the incorporators, containing substantially the following matters, except as otherwise prescribed by this Code or by special law: . . ." To prove the identities of each incorporator, they are required to indicate their individual Tax Identification Numbers (TINs) in the articles of incorporation pursuant to Section 236 of the National Internal Revenue Code, which provides that: ". . . (J) Supplying of Taxpayer Identification Number (TIN). Any person required under the authority of this Code to make, render or file a return, statement or other document shall be supplied with or assigned a Taxpayer Identification Number (TIN) which he shall indicate in such return, statement or document filed with the Bureau of Internal Revenue for his proper identification for tax purposes, and which he shall indicate in certain documents, such as, but not limited to the following: . . . (5) Documents to be registered with the Securities and Exchange Commission; Only one Taxpayer Identification Number (TIN) shall be assigned to a taxpayer. Any person who shall secure more than one Taxpayer Identification Number shall be criminally liable under the provision of Section 275 on 'Violation of Other Provisions of this Code or Regulations in General." EITcaH It cannot be gainsaid that the articles of incorporation is the basic corporate contract which is accorded with reverence by the law and the courts, as manifested by the stringent rules for its registration. Once found to be compliant with the registration requirements, the state, through this Commission, shall grant its approval to the incorporation of a corporation. However, it must not pass unstressed that any provision contained in the articles of incorporation which turns out to be fictitious shall cause the state to revoke approval it previously granted for the incorporation of a corporation. It has been undisputed that TIN 185-649-940-000, as indicated in the articles of incorporation of subject corporation, does not belong to incorporator, Marilou Tumandao. This misrepresentation is bolstered by no less than the letter-certification from BIR, which confirmed that Ms. Tumandao has in fact not been issued any TIN. The misrepresentation in the articles of incorporation in effect renders the same non-compliant with the mandatory requirements of Sections 10 and 14 of the Corporation Code. More importantly, the same constitutes fraud in procurement in the certificate of registration. "Fraud" as mentioned in Section 6, paragraph i (1), of Presidential Decree 902-A, as amended, refers to fraud attendant in the registration and the same must be contained or connected with the documents and/or papers presented to the Commission for the registration of said corporation, partnership or association. 1 Under Section 5.1 (a) of the Securities Regulation Code, the Commission is vested with authority to revoke the certificate of registration of corporation for any valid ground provided by the law, thus: "The Commission shall act with transparency and shall have the powers and functions provided by this code, PresidentialDecreeNo.902-A , the CorporationCode, the InvestmentHouseslaw, the FinancingCompanyAct and other existing laws. Pursuant thereto the Commission shall have, among others, the following powers and functions: . . . ECaScD (m) Suspend, or revoke, after proper notice or hearing the franchise or certificate of registration of corporations, partnerships or associations, upon any of the grounds provided by law;" Fraud indubitably exists in the procurement of the certificate of registration of subject corporation, therefore, the revocation of its certificate of registration is inevitable and proper. II. Subject corporation failed to comply with its reportorial requirements Section 141 of the Corporation Code requires every corporation to submit its annual reports to the Commission, such as General Information Sheet, Financial Statements and other requirements of this Commission, thus: "Every corporation, domestic or foreign, lawfully doing business in the Philippines shall submit to the Securities and Exchange Commission an annual report of its operations, together with a financial statement of its assets and liabilities, certified by any independent certified public accountant in appropriate cases, covering the preceding fiscal year and such other requirements as the Securities and Exchange Commission may require. Such report shall be submitted within such period as may be prescribed by the Securities and Exchange Commission." CRMD received the recommendation from CGFD for the revocation of the certificate of registration of subject corporation on the ground of non-compliance with reportorial requirements. Section 5 (m) of Republic Act No. 8799, otherwise known as the Securities Regulation Code, in relation to Section 6, paragraph i (6), of Presidential Decree No. 902-A, as amended, vests the Commission with the authority to revoke the certificate of registration of a corporation based on failure to file the required reports in appropriate forms within the prescribed period as determined by the Commission. By virtue of SEC Resolution No. 359, Series of 2010, CRMD is empowered by this Commission to revoke the certificate of registration of a corporation on the ground of fraud in the procurement of certificate of registration and non-compliance with reportorial requirements. WHEREFORE, premises considered, the Certificate of Registration of DALANGPAN SANG AMON UTOD KAG KASIMANWA FOUNDATION INC., issued on April 25, 2008 under SEC Registration No. CN200806262, is hereby REVOKED. Let a copy of this Order be attached by the Corporate Filing and Records Division (CFRD) of this Department to the corporate records of subject corporation on file with this Commission and its "revoked" status be entered in the SEC online database by the Information and Communications Technology Department (ICTD) of this Commission. SO ORDERED. Mandaluyong City, Philippines. September 12, 2014. (SGD.) FERDINAND B. SALES Director Footnotes 1. In the Matter of Charyn Marketing Enterprise Corporations, SEC Case No. 03-05-49.