MANILA -The Anti-Red Tape Authority (Arta) rejected the request of social media-based payments LYKA Philippines Solutions Inc. to be granted automatic approval for company registration with the Securities and Exchange Commission (SEC).
The SEC said in a statement that LYKA had failed to submit complete documentary requirements and was also under investigation for alleged money laundering.
“Considering the foregoing, the requirements laid down under Section 10 of RA (Republic Act) 9485, as amended, and its Implementing Rules and Regulations for Automatic Approval have not been met. Thus, Automatic Approval is not warranted in the instant application for registration of company submitted by LYKA with the SEC,” said the SEC, which cited the Arta notice of denial last March 6.
Under investigation
According to the corporate regulator, LYKA president Michael Bryant Lim sought Arta’s help to be granted automatic registration after citing delays on the part of the SEC.
“The Arta, however, affirmed the Commission’s position that the automatic approval mandated by law did not apply to LYKA, given that entities under investigation are not covered by the reglementary period provided in the Ease of Doing Business Act, and that automatic approval is only applicable upon submission of complete requirements,” the SEC said.
“LYKA and its proposed major stockholder, Things I Like Co Ltd., was issued a cease and desist order for violation Republic Act No. 11127, or the National Payment Systems Act, and is now suspended of possible money laundering,” it added.
Unregistered, celebrity-backed ‘Lyka’ told to cease operations by BSP
The SEC noted the required documents were “indispensable to the Commission’s evaluation of the feasibility and sustainability of the company’s operation, in order to safeguard merchants, investors and the shareholders of the company.”
Moreover, LYKA failed to comply with a directive from the SEC Enforcement and Investor Protection Department (EIPD) requiring it to submit proof as to how it finances operations, the company’s list of merchants, list of payables and other documents.
“Clearance from the EIPD is one of the requirements for businesses engaged in the financial technology sector seeking to register with the SEC,” the corporate regulator said.
READ MORE:
Gov’t ramps up surveillance of fintech firms’ operations