Action against Kapa began in 2017, says SEC Commissioner

An official of the Securities and Exchange Commission (SEC) bared on Tuesday that they commenced legal action against Kapa Community Ministry International as early as 2017.

SEC Commissioner Javey Paul Francisco told Edge Davao in an exclusive interview that the action against Kapa started way back two years ago and was not spurred by the interview made by Pastor Apollo Quiboloy with President Rodrigo Duterte who publicly made the order to shut down Kapa and other like investment scams proliferating predominantly in Southern Mindanao.

“As far as SEC is concerned, in the case of Kapa, we issued an Advisory against Kapa (then spelled Kappa) as early as 2017 and another one last year warning the public against investing with this un-licensed investment-taker. We likewise issued a CDO and later a revocation order. Many did not heed our warnings. Thus, we had to shut them down to enforce the law and protect the investing public from further damage arising out of this illegal scheme,” Francisco said.

SEC issued an advisory against Kapa on March 8, 2017, saying the group was not authorized to solicit investments after it allegedly started collecting investments from the public with a promise of 30 percent interest each month “until forever.” In October 2018, the SEC issued another warning against Kapa for similar activities. In February this year, the SEC issued a cease and desist order against Kapa. Several raids have been conducted on Kapa offices across the country. 

Francisco clarified that based on SEC records, Kapa Community Ministry International is legally inexistent since April as their permit has been revoked. 

“We revoked their registration last April pa,” SEC Commissioner Javey Paul Francisco told Edge Davao in an interview on Tuesday, a day after the agency announced it  is on the process of preparing the criminal complaints against officials of the said group over the alleged multi-billion investment scam masked as religious donation. 

Kapa did not have the appropriate secondary license for investment products, but still solicited what it called “donations” promising returns as high as 30 percent per month. 

Based on estimates from its 5-million membership, SEC said Kapa has amassed around P50 billion in the investment scheme. Kapa, led by founder Pastor Joel Apolinario, reportedly accepted investments, which it dubbed as “donations” of no less than P10,000 from each of its members. In return, Kapa promised a monthly interest rate of 30 percent, dubbed as “blessings” by the group. The SEC said Kapa promised billions of pesos to its members, but it revealed based on records from the group’s statement of assets cannot back up such claims. 

Francisco said a freeze order was issued by the Court of Appeals. This means, Kapa cannot use any monies in their bank accounts to pay off their members as promised.

Asked if Kapa members can still retrieve their money, Francisco said: “Subject to court proceedings, monies recovered may be returned to investors.”

However, he said it is not certain at this point if Kapa’s leaders can return the money to their members. “In earlier scams, investors were left holding an empty bag when the scam artists simply took off with their money and disappeared.”

“We will file criminal charges for violation of the Securities Regulation Code. The filing of charges will include not only the principal officers of Kapa but may also include all those who acted as broker, salesmen or agents in selling or convincing people to invest,” said Francisco.

Francisco also downplayed that Pastor Quiboloy ‘triggered’ the crackdown by egging President Duterte to take actin against Kapa.

“PRRD has always been hard against scams. Aside from being a former prosecutor, sometime in 2016 when he was still mayor of Davao, the Jacama ponzi scam happened and he had it shut down immediately. In fact, an anti-scam unit was formed in Davao City shortly after and it exists to this day,” Francisco said

Pastor Apolinario has repeatedly denied the allegations insisting his organization’s goal was to help the poor.

Kapa, short for Kabus Padatuon or Enrich the Poor in the local language, was registered as an independent religious group on March 3, 2017, with headquarters in Bislig City in Surigao del Sur, according to SEC records. 

Effective June 9, Kapa has announced it is temporarily shutting down operations for a “week of prayer.” On its social media page on Tuesday, Kapa called on its members nationwide to join a Grand Prayer Rally at the Oval Plaza in General Santos City on June 13.