MANILA– The Securities and Exchange Commission (SEC) on Wednesday warned the public at large against a perfume investment scheme, which promises a 400 percent return under a “buy and earn” program.
In an advisory,
the SEC said Scentko World Corp. and its parent firm Brendahl Cruz Holdings
Inc. have not secured a secondary license to solicit investments from the
public.
“In view thereof, the public is hereby advised to exercise caution in dealing
with any individuals or group of persons soliciting investments or recruiting
investors for and on behalf of Scentko and Brendahl Cruz Holdings,” the
advisory read.
Under Scentko’s investment scheme, the company entices the public to buy
perfume and beauty products in exchange for “cash sales rewards” equivalent to
400 percent of the purchase price.
For instance, a member is promised a return of P20,000 for simply buying a package worth P5,000, the corporate regulator said.
“A member may receive the promised return in more or less than 30 days, without having to resell the products, depending on how soon Scentko can recruit new members. Accordingly, the company encourages its members to recruit,” the SEC said.
“Aside from the
cash sales rewards, Scentko promises a referral fee equivalent to 10 percent of
the amount invested by the new member,” it said.
Scentko and Brendahl Cruz Holdings are SEC registered corporations.
But the corporate
regulator noted certificate of incorporation only grants an entity a “juridical
personality” and does not constitute an authority to engage in activities requiring
a secondary license to sell and offer securities.
Under Section 8 of Republic Act No. 8799, or the “Securities Regulation Code,”
securities such as investment contracts shall not be sold or offered for sale
or distribution without a registration statement duly filed and approved by the
commission.
No person shall engage in the business of buying or selling securities in the
Philippines as a broker or dealer, or act as a salesman, or an associated
person of any broker or dealer unless registered with the SEC, according to
Section 8.
“In this light, those acting as salesman, broker or agent for Scentko and
Brendahl Cruz Holdings may be prosecuted and held criminally liable,” the SEC
said.
“They may face a
maximum fine of P5 million or imprisonment of 21 years or both, pursuant to
Section 73 of the Securities Regulation Code,” it said.
Scentko and Brendahl Cruz Holdings add to at least 42 investment schemes
earlier flagged by the SEC this year. (GMA News)
