SEC revokes license of lending firm Robocash

The Securities and Exchange Commission (SEC) has revoked the authority of Robocash Finance Corp. to operate as a financing firm for running several branches without the necessary license.

The SEC Corporate Governance and Finance Department (CGFD) issued the revocation order against Robocash on December 12, the commission said on Thursday.

The department has established that Robocash violated the Implementing Rules and Regulations of Republic Act No. 8556, or the Financing Company Act of 1998 (FCA IRR).

“In the course of its monitoring procedure, the CGFD found that Robocash operated several branches without the requisite CA (certificate of authority),” the SEC said.

“The findings were validated through onsite audits on March 7, 2019 and July 5, 2019.”

Robocash also confirmed the audit results at a hearing on September 20, 2019 and through various letters to the SEC, according to the corporate regulator.

“The CGFD on November 13, 2019 issued a formal charge against Robocash and ordered the company to show cause why its CA should not be revoked for violating the Financing Company Act of 1998,” the SEC said.

Robocash admitted establishing and operating branches without the necessary CA, the commission noted, citing the company’s verified answer.

The company, however, argued that it did not maliciously violate Section 6(a) of the FCA IRR by putting up branches without authority.

The CGFD found no merit in the company’s defense, saying: “It may be well to note that respondent was able to secure 32 CAs for 32 separate branches. Thus, it is even more appalling that despite being aware of the requirement of the law, Respondent knowingly and willingly committed repeated violations thereof.”

Under Section 14 of the FCA IRR, the SEC may suspend or revoke an company’s certificate of authority after proper notice and hearing. The commission may also impose a basic fine of not less than P10,000.00 plus P100.00 for each day the violation continues, but not more than P100,000.00, and other sanctions within its power.

The CGFD initially imposed monetary penalties against Robocash for violating Section 6(a) of the FCA IRR.

The SEC issued the corresponding orders for the company to pay the penalty on November 5, 6 and 7, 2019 for the first, second, and third violations of the rule.

“And, while it is true that the commission may impose penalties other than revocation of CA, considering the number of times the respondent knowingly and willingly committed the same violation, the department is constrained to rule, as it is hereby ruled, that the revocation of respondent’s CA is warranted under the circumstances,” the CGFD noted.

“As a final note, while the respondent’s goal of catering to the needs of the underserved is laudable, it must always be remembered that compliance with the provisions of the law is foremost. The department will not hesitate to impose the appropriate penalties in cases of violation, even the extreme penalty of revocation of the Certificate of Authority.”

The SEC has revoked the primary registration of 2,081 lending and financing companies without the necessary certificates of authority in an ongoing crackdown on illegal lending and financing activities.

The commission also revoked the certificates of authority of two lending companies—Moola Lending Corporation for violating Republic Act No. 3765, or the Truth in Lending Act, and of the terms and conditions of its certificate of authority under Republic Act No. 9474, or the Lending Company Regulation Act and its IRR.

The SEC has issued cease and desist orders against 48 online lending applications for operating without incorporating and securing certificates of authority. —Ted Cordero/VDS, GMA News