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In a resolution dated March 14, the SEC en banc made the order permanent after
KAPA failed to file a motion to lift the CDO within the prescribed period.
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The SEC issued the CDO on February 14, citing substantial evidence that KAPA
has offered and sold securities – in the form of investment contracts and in the
guise of donations – without the necessary license and in a manner resembling a
Ponzi scheme.
The CDO covers the partners, officers, directors, agents, representatives and all
other persons acting for and in behalf of KAPA, which also operates as KAPA
Kabus Padatuon (Enrich the Poor), KAPA/ KAPPA (Kabus Padutoon), KAPA-
Co Convenience Store and General Merchandise, and KAPA Worldwide
Ministry.
The 2016 SEC rules of procedure provide that a CDO would be deemed
permanent if the respondent failed to file the appropriate pleading within the
prescribed period. KAPA had five days from receipt of the CDO to move for the
lifting thereof.
SEC also noted that the CDO against KAPA would remain valid notwithstanding
an ongoing petition by the religious corporation for a preliminary injunction.
While KAPA did not file any motion at the SEC to counter the CDO, it filed
before the Regional Trial Court (RTC) in General Santos City a petition for
injunction with application for issuance of a 72-hour restraining order, a
temporary restraining order (TRO) and/or a writ of preliminary injunction. But in
an order dated March 1, the court denied the application for the 72-hour TRO,
noting that KAPA still had a remedy to file a motion to lift the CDO with the
SEC. KAPA, however, did not avail of said remedy.
SEC believes the petition must be dismissed outright, arguing that the RTC had
no jurisdiction over this case.
Section 179 of the Revised Corporation Code affirms that “no court below the
Court of Appeals shall have jurisdiction to issue a restraining order, preliminary
injunction, or preliminary mandatory injunction in any case, dispute, or
controversy that directly or indirectly interferes with the exercise of the powers,
duties and responsibilities of the Commission that falls exclusively within its
jurisdiction.”
SEC has reiterated its calls on the public to be cautious in dealing with KAPA
and to report to its head office or extension offices any continued investment-
taking activity by KAPA and its allied entities.
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