A financial firm, Digido Finance Corp., is contesting a recent order from the Securities and Exchange Commission (SEC) that effectively halted its lending operations. The SEC issued the directive on February 18th, citing continued business activity despite a prior revocation of the company’s registration and license.
The core of the dispute centers around Digido’s continued lending practices after its corporate registration was revoked. The SEC alleges violations of key sections within the Financing Company Act’s implementing rules, specifically concerning operating without proper authorization.
Digido, however, has responded with a motion for reconsideration, firmly asserting its disagreement with the SEC’s assessment. The company believes the basis for the imposed fine and cited violations warrants further review and has formally appealed for reconsideration.
In compliance with the SEC’s order, Digido has suspended its loan issuance activities. Despite this pause, the company maintains its right to challenge the decision through legal channels, emphasizing a commitment to transparency and regulatory adherence.
The SEC’s order doesn’t stop at halting operations; it also includes a substantial administrative fine of P600,000. This penalty is divided among the company itself and five of its officers, each facing a P100,000 levy.
Digido argued that the order wasn’t immediately enforceable while under appeal, but the SEC’s Financing and Lending Companies Department (FLCD) swiftly dismissed this claim. The FLCD clarified that revocation orders are considered immediately executory under established SEC procedures.
Evidence presented by the FLCD indicates Digido continued a full spectrum of lending activities even after the revocation. This included processing applications, disbursing loans, issuing crucial financial documents, and actively managing existing loan accounts.
Further complicating the situation, the SEC discovered Digido was utilizing a subsidiary, Fingertip Finance Corp., to handle loan servicing and collections. Fingertip Finance Corp. is wholly owned by Robocash Pte. Ltd., a company based in Singapore, adding an international dimension to the case.
The case highlights the SEC’s rigorous enforcement of financial regulations and its commitment to ensuring companies operate within the bounds of the law. Digido Finance Corp. now faces a critical juncture, navigating the legal process while striving to defend its business practices.
