Gasoline Companies

August 24, 2021 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT SEC ADVISORY The Commission has received reports that there has been a proliferation of offering and solicitation of investments for the purpose of setting up gasoline stations or investing in already existing small GASOLINE COMPANIES in the guise of a franchise agreement, co-franchisee agreement, partnership agreement, co-ownership contract and/or other forms of contract that offers to the public an opportunity to invest in their company and earn profit " hassle free ." The usual scheme of these small GASOLINE COMPANIES is to lure investors by advertising that they can co-own a gas station for a minimal amount of at least Three Hundred Thousand Pesos (PhP300,000.00) . These GASOLINE COMPANIES usually offers the following: 1. Subscription to the shares of stock of the company; 2. Partnership Agreement, where a gas station will be co-owned by several partners; and 3. Co-Franchisee Contract wherein a single gas station will be franchised and owned by several co-franchisees. In the said offers, the construction, management and operation of the gas stations will be the responsibility of the company. The investors just have to place their money, sign the contract, then wait for the quarterly distribution of profits. Some would even offer a guaranteed profit by claiming that the loss will be shouldered by the company. The Commission reminds the public that these kinds of contracts or investment schemes, no matter how they are called, would squarely fall under the definition of an "investment contract" and/or subscription of " shares of stocks ." Therefore, in the eyes of the law they are considered as securities under the regulatory jurisdiction of the Commission. The public solicitation of securities is mandated by Republic Act No. 8799 or the Securities Regulation Code to be registered with the Commission. Thus, any issuance of unregistered securities is illegal. We wish to inform the public that the SEC website, thru the link https://www.sec.gov.ph/registered-firms-individuals-and-statistics/registered-firms-and-individuals/ contains the exclusive list of registered issuers of securities with corresponding Permit to Offer and Sell Securities. Investments not included in the list are deemed to be unregistered and therefore not authorized to be offered to the public. On the other hand, the Capital Market Participants Registry System (CMPRS) thru the link http://cmprs.sec.gov.ph/ lists down the capital market institutions and individuals authorized to solicit investments such as broker dealers in securities and salesmen. The Commission warns that those who act as salesmen, brokers, dealers or agents of these GASOLINE COMPANIES in selling or convincing people to invest in the scheme being offered by said entities including solicitations and recruitment may be prosecuted and be held liable under Section 28 of the Securities Regulation Code (SRC) and can be penalized with a maximum fine of Five Million Pesos (PhP5,000,000.00) or penalty of Twenty-One years of imprisonment or both pursuant to Section 73 of the SRC. Also, those who invite or recruit others to join or invest in such venture or offer investment contracts or securities to the public may incur criminal liability, or otherwise be sanctioned or penalized accordingly as held by the Supreme Court in the case of Securities and Exchange Commission vs. Oudine Santos (G.R. No. 195542, 19 March 2014). The Public is hereby advised to exercise caution in dealing with these GASOLINE COMPANIES or persons purporting to be their representatives. Should you have any information regarding any investment solicitation by any individuals or group of individuals on behalf of these GASOLINE COMPANIES , please send your report to the ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT (EIPD) at [emailprotected] . For the guidance of the public. Pasay City, August 24, 2021.