‘SHELL GAME’: SEC probes foreigner behind 41 Iloilo corporations

By Rjay Zuriaga Castor

A foreign national has come under scrutiny in an ongoing anti-money laundering and counterterrorism financing investigation that allegedly uncovered misrepresentation and links to dozens of corporations registered in Iloilo and elsewhere in the country.

The Securities and Exchange Commission (SEC)-Iloilo, a member of the multi-agency Anti-Money Laundering and Counterterrorism Financing (AML/CTF) Task Force in Western Visayas, disclosed that the individual is linked to 41 corporations registered in Iloilo.

The individual is also reportedly involved in several corporations across the country, including in Palawan.

The SEC withheld details about the individual’s nationality, gender, and identity because of the ongoing investigation.

Joel Lenaming, Securities Counsel I of SEC-Iloilo, said investigators are looking into allegations that the foreign national may have misrepresented his or her nationality and registration details.

“We have an ongoing investigation that is too complex. It involves a foreigner that faked his nationality and he has formed 41 corporations and from that, we can see that he/she also has corporations spread across the country,” he said during a news briefing Wednesday, June 3.

The SEC said intelligence indicated the individual listed an address in Iloilo but is no longer believed to be in the Philippines.

The SEC is also verifying information suggesting registration records with the Philippine Statistics Authority may have been falsified.

According to the SEC, the corporations are engaged in various sectors, including construction, shipping, real estate, machinery, and building-related businesses.

Citing the broad scope of the corporations’ business activities, Lenaming said the individual is “saturating all industries so they can procure property.”

Lenaming said one corporation allegedly linked to the foreign national acquired about 60 hectares of land, exceeding the legal limit of five hectares allowed for corporations under Philippine law.

Foreign nationals are generally barred from owning land in the Philippines under the 1987 Constitution, with limited exceptions.

He added that investigators are also examining financial records showing some corporations hold assets exceeding PHP 60 million despite having an authorized capital stock of only PHP 5 million.

Some corporations linked to the investigation also failed to submit financial reports to the SEC, raising suspicions that several entities may have been established primarily to facilitate banking transactions and cash flow activities.

Aside from facilitating financial transactions, investigators are also exploring the possibility that some corporations were not operating and were registered mainly to acquire properties.

Lenaming said the corporations and properties may have been used for money laundering and terrorism financing.

“It was shocking. We were shocked because we are not aware,” he added.

The SEC-Iloilo described the case as the “biggest and so far the widest scope endorsed to the SEC as of recent years.”

Lenaming said regulators are also examining alleged corporate fronting or nominee arrangements used to bypass Philippine laws restricting foreign ownership.

He said some foreigners enter the Philippines and convince Filipinos to set up corporations on their behalf.

Under the scheme, Filipinos are listed as directors, officers, and shareholders in SEC registration documents while the foreign national allegedly controls operations, finances, and property acquisitions behind the scenes.

“Sometimes a foreigner comes to the Philippines and conspires with Filipinos to incorporate a company. The foreigner provides the capital and sets everything up, including the purchase of properties,” he said.

Such fronting arrangements are prohibited under the Anti-Dummy Law, or Commonwealth Act No. 108, which penalizes the use of Filipino nominees to circumvent limits on foreign ownership.

Lenaming warned that Filipino nominees may face criminal, civil, and administrative liabilities if irregularities are uncovered because their names appear in official corporate records while the actual beneficial owner remains concealed.

He added that corporations may also be misused as vehicles for concealing the identities of individuals involved in suspicious financial activities.

“In anti-money laundering investigations, corporations can be used as vehicles. If you are a sole proprietor, your personal assets may be exposed to liabilities and are at risk. But in a corporation, there is a shield. If that is the asset, the liability is also set there. Because of that structure, individuals behind the corporation can sometimes hide more easily,” he explained.

The AML/CTF Task Force in Western Visayas was activated March 23 and is composed of representatives from the Office of the Regional Prosecutor 6, National Intelligence Coordinating Agency, Philippine National Police (PNP), National Bureau of Investigation (NBI), 3rd Infantry Division, Philippine Drug Enforcement Agency, Bureau of Customs, and SEC.

Lenaming said the SEC plays a critical role because it serves as the repository of corporate records and ownership information.

“We are the registrar and the repository of all records of corporations and the individuals involved in them. How can the PNP and the NBI conduct an investigation if they do not know who to investigate and only have the name of a corporation?” he said.

Beneficial ownership triggered probe

Lenaming said the anomaly was discovered through the Hierarchical and Applicable Relations and Beneficial Ownership Registry (HARBOR), the SEC’s digital platform for filing beneficial ownership information.

The registry is designed to identify individuals who ultimately own or control corporations, helping regulators detect corporate layering schemes that may obscure ownership structures, evade nationality restrictions, or conceal illicit activities.

“HARBOR is a separate registry. When you enter the name of a corporation, you can identify its beneficial owner. If the beneficial owner is a suspicious foreign national who may have misrepresented himself or herself as a naturalized Filipino, that can be investigated,” Lenaming said.

Lenaming said the SEC is “very strict” in enforcing the beneficial ownership registry to ensure transparency in corporate ownership.

He added that the system helps authorities identify liabilities and trace individuals who may be involved in questionable arrangements.