The Securities and Exchange Commission issued a cease-and-desist order against Klikmart Shopping Club Corp., also known as Klikmart Rewards, after selling investment securities without any authority or license.
The SEC in an order posted on its Web site directed Klikmart Shopping and units Kilkmart Dragon Corp., Klikmart Rewards, Klikmart Distribution and Marketing Services as well as officers and agents to stop offering securities or investment contracts to the public until it filed a registration statement.
The SEC also directed the Klikmart Shopping to stop offering the same unregistered securities through the Internet.
“The Commission will institute the appropriate administrative and criminal action against any persons or entities found to act as solicitors, information providers, salesmen, agents, brokers, dealers or the like for and behalf of the subject corporations,” the SEC said.
Klikmart Shopping was registered with the SEC in March 2015 with an authorized capital stock of P500,000. The company is engaged in the business of marketing and distribution of goods, such as soap, perfumes, wares and merchandise for every kind in wholesale of retail basis.
The SEC after surveillance and ocular inspection found Klikmart Shopping luring investors to put in their money into the company with the promise that it will earn 33 percent interest after a minimum of 21 days to a maximum of one month.
Requiring a minimum investment ofP15,000, the company offers two boxes of coffee and one box of soap for every P1,500 investment.
An investor may also get P50 per every direct referral who will invest a minimum of P1,500.
Klikmart Shopping has branches in Cavite, Laguna Quezon City, Mindoro, La Union and Davao.
The SEC, however, said investment contracts being sold by the company were not registered with the corporate regulator.
An investment contract refers to a transaction or a scheme in which a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.
“Obviously, Klikmart Shopping’s business model and capitalization cannot sustain the promised returns of investments, especially if no new investors will come in. Obviously, pay-outs for investors are financed from investment contracts. This is a clear fraudulent scheme which will likely cause grave or irreparable injury of prejudice to the investment public,” the SEC said.