SEC lifts Jia Financing suspension
The Securities and Exchange Commission (SEC) has lifted its temporary suspension order on Jia Financing Inc., allowing the company to resume operations.
In a statement sent to the Inquirer on Friday, Jia Financing said it was focused on small and medium enterprise financing, clarifying that it was not an unauthorized online lending platform.
“We respect the SEC’s role in ensuring proper governance for financing companies, and we are grateful for their guidance,” said Krizanne Ty, Jia Financing country head.
The SEC issued a resolution on Sept. 9 lifting its 60-day suspension order on Jia Financing, instead ordering the company to pay a P10,000 fine.
The corporate watchdog earlier said Jia Financing had been operating a website that offers “various financing services,” including providing loans ranging from $50,000 to $200,000 per client.
But the SEC said the company failed to disclose that it had launched its website, thus violating Memorandum Circular No. 10, Series of 2021.
Under this circular, only online lending platforms registered as of Nov. 2, 2021, are allowed to continue operating after the SEC received numerous complaints about the supposed violations of companies in this sector.
However, Jia Financing argued in its motion for reconsideration that it was not given the right to due process, as it was not notified that it was being charged with violating SEC rules.
It likewise pointed out that the suspension of its certificate of authority “may be a disproportionate penalty,” since its services were “more helpful, rather than detrimental, to its borrowers.”
According to Jia Financing, it offers business financing products—invoice, receivables, purchase order and working capital financing—and not consumer online lending.
In granting the company’s motion for reconsideration and opting to impose a smaller fine, the SEC found that its Financing and Lending Companies Department had failed to inform Jia Financing of its alleged violation.
“While it is clear that [Jia Financing] may have implemented its business plan without securing prior SEC approval, it is imperative to recognize that [Jia Financing] has the right to be adequately notified of the charges it faces,” the SEC said in its resolution.
“The failure to specifically notify the movant has deprived it of the change to respond appropriately and clarify its position,” it added.
For their part, Ty said the SEC’s resolution “closes a temporary chapter and gives us clarity to move forward with renewed focus on expanding access to SME financing.”
