The Securities and Exchange Commission (SEC) has cancelled the lending license and corporate registration of Flying Bear Lending Corp., operating as Yopeso, Morepeso and Rapidpeso, over its failure to disclose its online lending platforms (OLPs) to the Commission.
In an order dated June 8, the SEC Corporate Governance and Finance Department (CGFD) found that Flying Bear Lending continuously violated SEC Memorandum Circular No. 19, Series of 2019 (SEC MC 19) on the Disclosure Requirements on Advertisements of Financing Companies and Lending Companies and Reporting of Online Lending Platforms.
SEC MC 19 requires lending and financing companies to report their OLPs to the Commission prior to their launch and operation. Lending companies must also disclose in their advertisements and OLPs specific information, such as their corporate names, SEC Registration Numbers, and Certificates of Authority.
The memorandum circular further requires companies to register their OLPs as business or trade names, and to report any OLP which they plan to develop, operate, or utilize no later than 10 days before their launch.
Flying Bear Lending failed to report the operation of its OLPs Yopeso and Morepeso to the Commission. The CGFD then ordered Flying Bear Lending to take down the OLPs from Google Play and other distribution services. Flying Bear was also found to have similarly violated SEC MC 19 with respect to its other OLP, RapidPeso.
The CGFD also found that the company failed to comply with Republic Act No. 9474, or the Lending Company Regulation Act of 2007 (LCRA), and its Implementing Rules and Regulations (IRR). It failed to commence its operations within 120 days from the date of issuance of its CA, and that it failed to use at least 51% of its funds for direct lending purposes, violating Rules 3(e) and 3(f) of the LCRA IRR, respectively.
“[The CGFD] holds that the number, nature, gravity, and duration of [Flying Bear Lending]’s violations, its non-compliance with this Department’s directives, and its failure to attend the hearing to explain its side all showcase [the company]’s flagrant disrespect for this Commission and apathy for the very nature of lending business which is imbued with public interest,” the order read.
“Hence, the penalty of revocation of its CA is warranted in this instance.”
In addition, the CGFD has revoked the Certificate of Incorporation of Flying Bear Lending, due to its repeated violations of SEC MC 19 and the LCRA.
“[C]onsidering the number, nature, gravity, and duration of [Flying Bear Lending]’s violations that warrant the revocation of its CA, [the CGFD] finds that the revocation of its primary license or Certificate of Incorporation is likewise appropriate,” the CGFD said.
The revocation of Flying Bear Lending’s CA brings to 38 the total number of financing/lending companies with cancelled licenses due to various violations of SEC rules and regulations.
To date, the SEC has also revoked the primary registration of a total of 2,083 lending companies for their failure to secure the requisite secondary license – a Certificate of Authority to Operate as a Lending/Financing Company – pursuant to the LCRA, and for other violations.
The Commission likewise ordered 81 online lending applications to cease operations for lack of authority to operate as a lending or financing company last year.