The Securities and Exchange Commission said Tuesday it issued a permanent cease and desist order against Bacoor Doctors Medical Center, after it was found selling securities in the form of common shares of stock without secondary license from the corporate regulator.
SEC said in an order posted on its website it denied the motion for reconsideration filed by BDMC seeking for the lifting of the cease and desist order due to lack of merit.
“While the commission is cognizant of the respondent’s effort in assisting the government in its mission to address the problem of inadequacy of hospital facilities in distant areas by establishing a hospital in Bacoor, it is mandated by law however to ensure full and fair disclosure on securities sold to the public to insulate it against fraud,” SEC said.
“All told, the respondent presented a weak and self-serving defense. It failed to overcome SEC findings, which is supported by solid and factual evidence, that the respondent is indeed selling/offering securities to the public in the form of shares without necessary license from the Commission,” the regulator said.
BDMC, which operates a 100-bed tertiary hospital, denied the allegations during a hearing conducted by SEC. The medical company said all its shares were fully subscribed to and paid by its own stockholder in 2014.
SEC, however, said it had proof that selling and offering of the company’s shares were being conducted within the premises of the hospital.
“The cease and desist order issued against the corporation, its officers, directors, agents, representatives, conduit and any and all persons claiming and acting and behalf and under its authority is hereby made permanent,” SEC said.
SEC earlier cautioned the public against buying unregistered shares in hospitals.
The corporate regulator issued an advisory after four hospital groups, including Pacific Global Medical Center Inc., Diliman Doctors Hospitals Inc., South East Asia Medical Inc. and United Doctors Service Corp. were found selling shares not registered with the SEC.
It said to attract investors, the hospitals were selling shares allegedly to entitle buyers to certain hospital benefits such as waived or discounted operating room fees, free or discounted private room, ward and intensive care unit accommodations, discount on the use of ICU equipment, medicines and medical suppliers and discount on hospital services.