THE Securities and Exchange Commission (SEC) has canceled the certificate of incorporation of Dual Fuel Petroleum Corp. over what it described as the illegal solicitation of investments from the public.
In an order dated Feb. 17, the SEC鈥檚 Enforcement and Investor Protection Department (EIPD) said it revoked the company鈥檚 registration for violating Section 44 of Republic Act (RA) No. 11232, or the Revised Corporation Code of the Philippines (RCC); Sections 8.1, 26.1, and 28.1 of RA No. 8799, or the Securities Regulation Code (SRC); and Presidential Decree No. 902-A.
The RCC prohibits corporations from exercising powers beyond those stated in their articles of incorporation (AoI).
Sections 8.1 and 28.1 of the SRC prohibit the sale or offering of unregistered securities and require brokers, dealers, or salespersons to register, while Section 26.1 prohibits fraudulent schemes in securities transactions.
Dual Fuel Petroleum, which was incorporated in 2020, is engaged in the establishment, operation, management, and maintenance of gas stations, with franchising listed as a secondary purpose in its AoI. The company is not authorized to solicit investments from the public or issue investment contracts.
The SEC said its investigation found that the company offered securities in the form of investment contracts without the required licenses.
鈥淐onsidering that nowhere is it stated in its primary purpose that Dual Fuel Petroleum is authorized to engage in the selling or offering for sale of securities to the public鈥 the activity of [the company] of selling or offering for sale of investments is considered an ultra vires act and therefore constitutes serious misrepresentation,鈥 the order read.
The SEC also imposed a P1-million fine on the company for offering securities without the required registration or license. Its incorporators were also ordered to pay a P1-million administrative fine.
The SEC said Dual Fuel partnered with Legends Petroleum Corp., a franchising company, to attract public investment by offering franchise co-ownership with a minimum investment of P500,000 and promising quarterly profits for 20 years. The company offered 280 co-owner slots across eight gas stations.
The regulator said the scheme constituted fraud and resembled a Ponzi operation, in which returns to investors were derived from funds contributed by new investors or additional contributions from existing ones rather than from legitimate business activities.
Dual Fuel did not immediately reply to an e-mail seeking comment. 鈥 Alexandria Grace C. Magno
