By Jenniffer B. Austria
The Anti-Red Tape Authority rejected the petition filed by social media-based payments platform LYKA Philippines Solutions Inc. for the automatic approval of its company registration with the Securities and Exchange Commission.
The SEC said Thursday in a statement ARTA issued a notice of denial on March 6, after LYKA failed to submit the complete documentary requirements.
It said ARTA affirmed its position that the automatic approval mandated by law did not apply to LYKA as the company’s operations were suspended and were under investigation for “possible money laundering”.
Republic Act No. 9485, as amended by Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, provides that an original application or request for issuance of license, clearance, permit, certification or authorization shall be deemed approved if the concerned government agency fails to approve the same.
The SEC said LYKA also failed to comply to submit proof as to how the company finances its operation, list of merchants, list of payables and a document disclosing the owners of GRL17 Nominee Limited, which appeared as the founding member of major shareholder.
It said these documents are important for the SEC to evaluate the feasibility and sustainability of the company’s operation to safeguard merchants, investors and the shareholders.
“Considering the foregoing, the requirements laid down under Section 10 of RA 9485, as amended, and its implementing rules and regulations for automatic approval have not been met. Thus, automatic ppproval is not warranted in the instant application for registration of company submitted by LYKA with the SEC,” ARTA said.
The Bangko Sentral ng Pilipinas in July 2021 ordered LYKA to suspend its operations as it needed prior registration to operate in the country.
LYKA is a social media platform launched in the Philippines by a Hong Kong-based company. It allows users to purchase, exchange and use gift cards in electronic mode or GEMs as payment for goods and services.
It has 10 million registered users in the country and is endorsed by celebrities and social media influencers.
LYKA president Michael Bryant Lim earlier filed A request before the ARTA, saying that SEC supposedly failed to act on its application for company registration despite the submission of required documents.