SEC orders Mica Tan’s MFT Group to stop illegal sale of investments

Maria Francesca “Mica” Tan —MFT GROUP PHOTO

MANILA, Philippines  —The Securities and Exchange Commission (SEC) has ordered companies linked to businesswoman Maria Francesca “Mica” Tan to stop the illegal sale of investment contracts after receiving complaints that the group was soliciting money in exchange for high returns.

The regulator said in a statement on Thursday that it has directed Tan’s MFT Group and Foundry Ventures to “immediately cease and desist from further engaging in the unlawful solicitation, offer, and/or sale of securities in the form of investment contracts without the necessary license from the SEC.”

The SEC also barred the companies from further transacting with depository banks and from transferring or disposing of assets to ensure the preservation of the assets of investors.

The millennial Tan became a celebrated business figure and an icon for young entrepreneurs following MFT’s aggressive expansion into food, financial services and health care before the COVID-19 pandemic.

Securities disguised as loansAt one point in 2018, MFT said it controlled assets worth more than P3 billion.

MFT, which claims on its website to have 280 employees across 10 countries, lists several businesses in its portfolio, among them Saladstop! Vietnam, Mondial Kidney Care Center and Mimi & Bros restaurant.

But over the past two years, rumors started to circulate in online chat forums that the group was falling behind on their payments, prompting some investors to file a complaint before the SEC’s enforcement and investor protection department (EIPD).Tan herself was named in the SEC order alongside the directors and officers of the firm.

These were Florita Tan, Charles Edward Tan, Christian Konstantin “Ck” Agbayani, Ronaldo Nery, Parker Ong, Chiqui Tan, JD Montelibano, Romarico “Rico” Ruiz, Arlene Navarro, Beatriz Tomas, Mary Ruth Oquendo, Joanne Cabaero, Thuy Nguyen, Roxanne Agbayani, Luis Gabriel Cancio Jr., Noel Olan, JR Hernandez, Christian Olan, Tito Cosejo Jr. and Christian “Kenchi” de Vera.

According to the SEC, MFT Group and Foundry Ventures were found to be selling unregistered securities disguised as borrower-lender agreements that would later become promissory notes.

“[T]he MFT Group organized public events where it solicited investments supposedly for start-up companies in exchange for a guaranteed return ranging from 12 percent to 18 percent per annum. For this purpose, the MFT Group issued postdated checks but the amounts indicated in the checks would not be paid,” the SEC said.

No license to sell

According to the EIPD, the MFT Group deliberately used the term, “interest income” to give semblance of legitimacy to the transactions, which the group packaged as loans.

“[I]t is interesting to note how the subject persons and their agents appear to have deliberately used loan agreements, checks and even promissory notes to facilitate their unauthorized investment scheme,” the SEC noted.

“By using the said instruments, the subject persons and their agents made it appear that the investments which they were getting from the public are loans which are used to fund the operations of their alleged subsidiaries,” it added.

MFT Group and Foundry Ventures are registered corporations but lack the required secondary license to sell securities to the public.

“Considering that the subject persons and their agents have not been issued the requisite license to sell/offer securities, this Commission is duty-bound to immediately stop their unauthorized investment-taking activities for the protection of the investing public,” the SEC pointed out.