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By Darwin G. Amojelar, Senior Reporter
The Securities and Exchange Commission (SEC) has prohibited seven
more affiliates of the embattled Legacy Group of Companies from
selling assets without its approval.
The SEC issued a cease-and-desist order against
All Asia Plans Corp., United Farmers Sugar Corp., Legacy Emergent
Asset Management Inc., Edifice Realty & Development Corp., C2MPV
Realty Corp., Caluyucay Realty Corp. and R.L. Roa Realty and
Development Inc.
It barred these Legacy affiliates’ directors,
officers, salesmen, agents, representatives and any and all persons
from selling, encumbering, conveying or disposing of their
properties and other assets without prior written consent from the
commission.
The SEC’s Corporation and Finance Department
said that these seven affiliates are not registered issuers of
securities under Sections 8 and 12 of the Securities Regulation Code
and as such are not licensed to offer or issue securities.
It added that its enforcement department had
found that these affiliates were selling investment contracts to the
public without the requisite secondary license.
“The modus operandi is that the sales
agents/salesmen represent the investment products to be safe and
secure, offering rates of interest as high as 100 percent paid
through postdated checks,” the SEC said.
The corporate regulator gave the seven
affiliates five days to appeal to lift the order.
Other firms under the Legacy Group of Companies,
led by Celso de los Angeles, that were also prohibited from
operating their business include Legacy Consolidated Plans
Inc., Legacy Card Inc., Galaxy Realty & Holdings Inc., Shining
Armor Property Inc., One Realty Corp. and One Card Co. Inc.
The SEC also barred Legacy Consolidated Assets
Holdings Inc., Fusion Capital Corp., Legacy Motors Inc., Scholarship
Plans Phils. Inc., Conventional Realty Corp., Legacy T.D. Fund Inc.,
Legacy G.S. Fund Inc. and Legacy H.Y. Fund Inc.
Equally beleaguered Permanent Plans Inc., or
Permaplans, has been given a temporary lifeline.
Permaplans has secured a court reprieve on the
payment of its obligations to its planholders, except in the
ordinary course of business.
The stay order was issued by the Makati Regional
Trial Court recently after it sought corporate rehabilitation.
Alberto Reyes, legal counsel of Permaplans, said
that the rehabilitation will protect its planholders and trust
assets and assured that it intends to pay in cash all its maturing
plans on a deferred arrangement approved by the court.
Under the proposed rehabilitation plan,
Permaplans will pay its obligations amounting to P62 million over
five years after the maturity of the plan while the planholders earn
interest for the outstanding balance.
Once approved by the court, Permaplans intends
to make a fresh cash infusion of P200 million into its trust funds.
For those planholders who would choose to
pre-terminate their plans, the company will pay them off through
asset-cash formula.
Of the 10,000 to 11,000 planholders, Reyes said
about 1,700 had opted to pre-terminate and receive the current value
of their investments consisting 60-percent assets (mainly memorial
lots) and 40-percent cash.
But this mode of payment, which was originally
permitted by the SEC only if the planholders had consented to it,
was stopped and the subsequent suspension of its license to sell
resulted “in a run and even greater demand for withdrawals.”
Juan Miguel Vasquez, Permaplans president, said
that the court-supervised rehabilitation was intended to make
certain that planholders will get paid the full amount due them.
“We wish to assure you that you will be paid
and we remain committed to the ideals of being of service to you,”
he told the planholders. “We are not offering slimming tea . . .
but please accept our sincerest apologies for the inconvenience,”
Vasquez said.
He explained that the global economic meltdown
caused Permaplans to suffer huge losses in its trust assets in 2008,
when such assets shrank by 23 percent. The company had expected
earnings of 12 percent.
“The good news is that the market-to-market
losses are recovered if the trust fund were allowed to grow bigger
alongside the overall recovery of the country’s businesses. The
bad news is that these values would be forever lost if the assets
were disproportionately liquidated to settle maturities and requests
for early terminations,” Vasquez said.
He added that the low credibility of the
pre-need industry has resulted in sizeable panic-induced early
termination requests and “this is why Permaplans proposed a
settlement formula in order to conserve cash for the trust fund and
take care of all its planholders.”
Besides stopping the asset-cash payment and
withdrawing the firm’s license, the SEC also froze Permaplans’
trust fund and required prior clearance before payments could be
made.
“Permaplans was put in a state of paralysis.
We have to protect our trust fund, we cannot sell securities and we
cannot even settle claims, which all [led] to our decision to file
for corporate rehabilitation,” Vasquez said.
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