The Securities and Exchange Commission (SEC) has declared final and executory the revocation of the Certificate of Authority (CA) of Fynamics Lending Inc.to operate as a lending company, over its repeated failure to comply with reportorial requirements.
In an order dated January 5, the SEC Corporate Governance and Finance Department (CGFD) upheld its earlier order dated December 6, 2021revoking the CA of Fynamics, which operates online lending platform Pondo Peso, for its fourth violation of Rule 8(a) of the Implementing Rules and Regulations (IRR) of Republic Act No. 9474, otherwise known as the Lending Company Regulation Act of 2007 (LCRA).
Rule 8(a) of the LCRA IRR provides that a lending company that has been duly registered and granted a CA shall file with the SEC reports/manuals, including interim semi-annual financial statements, in accordance with a designated schedule.
Fynamics failed to submit its 2020 Second Semester Interim Financial Statements on the February 15, 2021 deadline, as per SEC Memorandum Circular No. 3, Series of 2013, which is already the fourth time the company has not complied with the submission of the said report.
The CGFD gave Fynamics a chance to explain why its CA should not be revoked through a show cause letter dated July 7, 2021, and through a hearing on October 11, 2021. However, Fynamics failed to submit an explanation or appear in the hearing.
“Thus, in light of the Company’s failure to respond to this Department’s Show Cause Letter and its continuous non-compliance with the reportorial requirements for lending companies, and considering that the Company was sufficiently notified and given opportunities to explain its position, this Department hereby finds that the revocation of the Company’s CA is in order,” the CGFD said.
Further, Fynamics did not file an appeal, motion for reconsideration, or petition for certiorari following the SEC’s issuance of the order revoking the company’s CA.
In addition to its failure to comply with reportorial requirements to the SEC, the CGFD has also previously penalized Fynamics for its first and second violations of SEC Memorandum Circular No. 18, Series of 2019, which provides the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.
“[I]n view of the foregoing, and in accordance with Part IV, Rule II, Sec. 2-4(a) of the [Revised Rules of Court], the Order revoking the Certificate of Authority to Operate as a Lending Company of Fynamics is final and executory.”