Toga Limited loses Philippine SEC registration over fraud
Following an internal investigation, the Philippine SEC has concluded Toga Limited is committing securities fraud.
Accordingly, Toga Limited’s Philippine SEC registration has been revoked.
The Philippine SEC commenced their investigation into Toga Limited after fielding multiple queries from the public.
One email detailed concerns about parents “giving up everything”.
I would like to know if Toga Capital Limited is a scam, my parents are giving up everything and inviting their friends too for this company and I would like to know if they’re genuine.
The SEC’s Toga Limited investigation was undertaken by the Enforcement and Investor Protection Department (EIPD) and Company Registration and Monitoring Department (CRMD).
Records suggest the SEC’s investigation commenced in early to mid 2018.
CRMD confirmed to EIPD that Toga Limited was registered with the SEC under TogaChat Academy Philippines in 2016.
CRMD also confirmed that TogaChat Academy had not been issued a securities or investment license, nor had it applied for one.
EIPD went on to confirm with the Markets and Securities Regulation Department and Corporage Governance and Finance Department, that TogaChat Academy did not have a securities license, nor any pending applications.
In July 2018 the EIPD sent a team of investigators to survey TogaChat Academy’s local office.
During the said surveillance operation, the EIPD investigators were able to talk to a certain Mr. Aries Bailingo and his male associate who introduced themselves as agents of TogaChat.
Mr. Bailingo discussed the company profile and compensation plan.
Based on Bailingo’s description of Toga Limited’s compensation plan and their own research, the EIPD concluded the company was an “investment scam”.
It became more evident that the respondent TogaChat is operating an investment scam when the SEC Zamboanga Extension Office informed the EIPD that there were two (2) Orders posted in the US SEC website in connection with TogaChat.
The first Order stated that Toga Capital Limited is a revoked Nevada corporation located in Kuala Lumpur, Malaysia with a class of securities registered with US SEC.
The Second Order refers to the show cause order against Toga Capital Limited.
In BehindMLM’s own Toga Limited review (published Feb 2019), we identified the company’s US SEC registration as a marketing facade.
The SEC registration for Toga LTD is still active.
As per Toga LTD’s last filed quarterly report, it appears Agel’s Malaysian company might be commingling funds with Toga Limited.
During three months ended October 31, 2019, the Company’s concentration of revenue for individual customers above 10% are as follows:
Shen Zhen Shi Ding Shang: 22%
Agel Enterprise International Sdn Bhd: 13%
During three months ended October 31, 2018, the Company’s concentration of revenue for individual customers above 10% are as follows:
Agel Enterprise International Sdn Bhd: 45%
Whether Agel, a US MLM company, is aware it’s Malaysian subsidiary is laundering money through a Ponzi scheme is unclear.
Based on the report, Toga Limited appears to be laundering invested funds through Malaysia and Indonesia.
Concentration of Revenue by Country:
Three months ended October 31, 2019:
Malaysia (TOGL Technology Sdn. Bhd): 47%
Indonesia (PT. Toga International Indonesia): 51%
United States (Toga Limited): 2%
Toga Limited had it’s US SEC registration revoked in April 2019. The stated reason for the action was securities fraud and failure to file periodic reports.
Getting back to the Philippines, in October 2018 the EIPD and National Police sent agents to a Toga Limited seminar.
The sting operation saw agents invest 5600 PHP into a Toga Limited Bronze package.
Continued surveillance into early 2019 confirmed Toga Limited, through Toga Chat,
continued with its fraudulent activities, enticing more investors and even foreigners.
In July 2019 the Philippine SEC issued its first public securities fraud warning against TogaChat Academy.
In August 2019 the EIPD issued TogaChat Academy with a show cause order, directing it to explain why its certificate of incorporation should not be revoked.
Reymelyn Cortes, cited as the President and CEO of TogaChat Academy, responded to the order on September 5th, 2019.
In her response, Cortes denied the SEC’s allegations.
We vehemently deny any allegation that our company was involved either directly or indirectly in soliciting/enticing the public to invest or pay any amount in exchange for a promise of high monetary rewards.
We never associate with any program or scheme to offer any investment package/scheme to members of the public.
We deny any involvement with any investment activity, recruitment program, share offering or any other activity in violation to the Securities Regulation Code or any other laws.
Cortes went on to claim Toga Limited had published press-releases in local newspapers also denying illegal activity.
Armed with documented evidence of investment and securities fraud, naturally the SEC wasn’t happy with Cortes’ response.
On December 17th, 2019, the SEC issued TogaChat and Cortes with a cease and desist.
Based on the evidence gathered, respondent TogaChat is engaged in offering, solicitation and sale of securities to the public without the required registration statement duly filed and approved by the SEC.
In the instant case, the investment scheme of respondent TogaChat, where an investor places a minimum amount of money according to the package he availed of to be invested in the shares of stock Toga Capital Limited, falls within the definition of securities.
Interestingly, in determining whether Toga Limited offers an investment contract, the Philippine SEC cites the US Howey Test.
Applying the foregoing, the investment scheme of respondent TogaChat falls within the ambit of an investment contract.
By investing in the scheme offered by the respondent TogaChat, the investor enters into a contract.
There is a placement of money wherein for a certain amount of capital invested, there will be a high return of money in the form of a commission.
The money invested is placed in a common enterprise and the investor expects to derive profits.
Finally, the investor expects to earn profits from the entrepreneurial and managerial efforts of others.
The investor need not do anything in order to earn the said return on their investment.
As confirmed in our own review, the SEC goes on to warn that Toga Limited is likely operating a Ponzi scheme.
The investment scheme of respondent TogaChat has the characteristics of a Ponzi scheme.
The Commission agreed with the finding of the EIPD that the investment scheme of respondent TogaChat is a Ponzi scheme, which is a type of investment fraud.
Subsequently, TogaChat was struck of the Philippine SEC registry. TogaChat Academy Philippines INC.’s incorporation was also revoked.
Given Toga Limited’s Philippine business operations are only used to solicit investment locally, this isn’t likely to have an effect on Toga Limited in Malaysia.
The Bank of Malaysia added Toga Limited (then Toga Capital) to its list of unauthorized companies in August 2017.
Since then however, no further action has been taken.
Having struck off Toga Limited, it is unknown whether the US SEC are now investigating Toga LTD.
Update 9th June 2021 – Following a regulatory ban from the Philippines, Toga Limited continued their Ponzi scheme through Eostre Berhad.
This prompted the Philippine SEC to issue a second warning and regulatory ban against the company.