SEC strips firm of license to lure investors to fictitious hospital project
MANILA, Philippines—The Securities and Exchange Commission (SEC) has revoked the corporate registration of Suhail Medical Center Inc., an entity that has been illegally soliciting investment for a fictitious hospital supposedly to be built in Calamba, Laguna.
In an order dated Feb. 3, the SEC Enforcement and Investor Protection Department (EIPD) found that the company, headed by one Jesser Cordova, had been publicly offering and selling securities without a secondary license from the SEC.
The EIPD further noted that Suhail’s promised profits and returns would be derived from the investments of new member-investors, not from its actual operations.
“Necessarily, this scheme is unsustainable as it must rely on a continuous inflow of new investors in order to make pay-outs to earlier investors, all the more made glaring considering that it has no actual operations yet to speak of,” the order read.
The EIPD has secured certification from the Health Facilities and Services Regulatory Bureau of the Department of Health stating that there was no license issued to a certain Suhail Medical Center located in Calamba, Laguna, nor was there an application for such health facility.
Suhail has been soliciting investments from the public worth P1.06 million for co-ownership seats to its supposed hospital. Investors also have the option to purchase half a seat worth P550,000.
The company promised investors returns in the form of quarterly revenues based on the hospital’s performance, free laboratories and checkups for the co-owners and their next of kin, as well as lifetime income.
Suhail Medical Center’s scheme involved securities, particularly an investment contract, whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others, according to the EIPD.
As a form of security, investment contracts must be registered with the SEC before they can be sold or offered within the Philippines, pursuant to Section 8 of Republic Act No. 8799, or the Securities Regulation Code.