The Seashore Beach Club, Inc.

July 7, 2020 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT SEC ADVISORY Based on numerous reports and information gathered by the Commission, THE SEASHORE BEACH CLUB, INC. ("SEASHORE") and MAV DISCOVERY BEACH RESORT DEV'T. CORP. ("DISCOVERY RESORTS") headed by their president and chairman of the board Mr. Arnel S. Mindanao are found to be offering and selling club shares to the public without authority and license to do so. According to their website theseashore.ph , SEASHORE is a membership resort and the certificates issued to members are non-proprietary in nature. The project was allegedly conceptualized by its president Mr. Arnel S. Mindanao, who is a seasoned sales and marketing person having gained more than 20 years of experience in selling various real estate projects in the Philippines in the local market and to foreign nationals. Purportedly, SEASHORE and DISCOVERY RESORTS are offering their club shares in the amount Php834,900 for their San Juan, Batangas project and Php900,000 (now Php1,035,000) for their Coron, Palawan project which are available in three payment options: Option A) Deferred Payment of 36, 48 and 60 months; Option B) Spot down payment of 30% and the 70% remaining balance to be paid in 36, 48, 60 months; and Option C) Spot cash payment and get 15% discount. Allegedly, SEASHORE and DISCOVERY RESORTS are enticing the public to avail of their club shares and promising the following privileges to investors: 1) Profit sharing of 30% of its annual net income which will be divided to all the members ; 2) 20% income referral when club membership is used by family or friends; 3) Life-time membership which can be inherited by heirs, with free one night stay for family members once a year; and 4) Certain percentage discounts from accommodation, water sports activities, restaurants, sports facilities, and its amenities. Based on the foregoing, the club membership shares being offered are proprietary shares and are considered as securities under Section 3 of the Securities Regulation Code (SRC). Hence, a secondary license or certificate of permit to offer securities is required before SEASHORE and DISCOVERY RESORTS could offer such club membership shares to the public. Further, the scheme of SEASHORE and DISCOVERY RESORTS in offering said shares to the public is considered as Securities Solicitation without a license or permit to do so. As the aforementioned scheme involves the offer and sale of securities to the public, the SRC requires that these securities are duly registered with the Commission and that concerned entity or its agents have appropriate registration and/or license to sell such securities to the public pursuant to Section 8 of the SRC. Records of the Commission show that SEASHORE and DISCOVERY RESORTS are registered as corporations with Company Registration Nos. CS201612679 and CS201723866, respectively. However, such registration merely grants juridical personalities to the corporations but does not authorize them to issue, sell or offer for sale securities to the public nor undertake business activities requiring a secondary license from the Commission. Furthermore, a Cease and Desist Order was already issued against SEASHORE on 31 August 2017, on the grounds of non-registration of securities, non-registration of broker or dealer of securities and commission of ultra vires acts. On 24 January 2018, a settlement agreement was entered with the Commission. However, SRC Rule 55.1.3.11. is clear in stating that if the proposer shall fail to comply with any of the terms of the settlement offer, the settlement shall be considered withdrawn and the investigation or proceedings against the proposer shall be reinstated. In view thereof, the public is hereby advised to exercise caution in dealing with any individual or group of persons engaged in securities solicitation for and on behalf of SEASHORE and DISCOVERY RESORTS . The public is further advised NOT TO INVEST or to STOP INVESTING in the securities being offered by the subject entities or their representatives. Everyone is reminded that aside from the strict penalties imposed by the Commission for violations of the Securities Regulation Code, the Revised Corporation Code, and such other rules and regulations it enforces, the Bayanihan to Heal as One Act (Republic Act No. 11469) also punishes those participating in cyber incidents that make use or take advantage of the current crisis situation to prey on the public through scams, phishing, fraudulent emails or other similar acts. Further, those who invite or recruit others to join or invest in such venture or offer 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). Should you have any information regarding the operation of SEASHORE and DISCOVERY RESORTS or any securities solicitation activity by any individual or group of individuals representing SEASHORE and DISCOVERY RESORTS , please send your report to the Enforcement and Investor Protection Department at [emailprotected] . For the guidance of the public. Pasay City, July 7, 2020.