The Securities and Exchange Commission (SEC) said Thursday it revoked the corporate registration of DNKC Corp. for allegedly soliciting investments from the public without securing the required license.
DNKC operated under several names including KC Skin Care, Goddess of Beauty-Beauty Lounge, JD’s CCTV Installation Services and Parts, JD’s Grill and Restaurant, DNKC Dental Spa, KC Aesthetic Clinic, JD’s Garage, DNKC Hypermash, DNKC Staykation and DNKC Sports Club.
The SEC said that based on the investigation conducted by its Enforcement and Investor Protection Department (EIPD), DNKC was found to have violated several laws including the Revised Corporation Code, the Securities Regulation Code and the Financial Products and Services Consumer Protection Act.
It said that aside from revocation of incorporation papers, the SEC also imposed a P1-million fine against DNKC for selling unregistered securities. It also directed the company’s incorporators to pay P1 million as administrative fine.
The SEC said DNKC was offering an “all-in-one business project” involving a rental business, dental spa, grill restaurant and beauty salon.
Investors were promised a 4.5-percent guaranteed return, plus an additional 5 percent for every successful referral. However, DNKC did not have a license to solicit investments from the public, the SEC said.
“Hence, the act of [DNKC] in soliciting investments from the public without the necessary secondary license from the Commission is unauthorized,” the SEC order stated.
DNKC was incorporated in May 2023 as a retail business with secondary purposes including operating restaurants, coffee shops and beauty services. Its registration documents specifically prohibit it from running investment schemes. However, it is prohibited from to operate an investment-taking scheme.
“Considering that nowhere is it stated in its primary purpose that DNKC Corporation is authorized to engage in the selling or offering for sale of securities to the public, the activity of [company] of selling or offering for sale of investments is considered an ultra vires act and therefore constitute serious misrepresentation,” the order read.
The SEC said it issued an advisory in December 2023 warning the public against investing in DNKC’s scheme. The SRC prohibits the selling of securities without prior registration with the SEC.
