JEDDAH, 18 May 2003 — If it is true that the OFWNet Foundation and OFW International Holdings are soliciting investments from Filipinos in Saudi Arabia under their so-called “reintegration program,” they should stop it at once. OFW Holdings is not registered with the Saudi Ministry of Commerce and cannot do business in Saudi Arabia.
Commercial Agency contracts are governed by regulations prevailing in the Kingdom, specifically the Commercial Court Regulations, Commercial Agencies Regulations and amendments and implementing procedures thereof, and the Arbitration Regulations and the relevant implementing procedures. OFW Holdings is not a legal entity in Saudi Arabia and contracts, oral or written, between OFW Holdings and any Filipino worker in the Kingdom are null and void.
Even under the Philippine Civil Code, Article 17, it is stated that the forms and solemnities of contracts, wills, and other public instruments shall be governed by the laws of the country in which they are executed. That means, acts — whether legal or illegal — committed by OFW Holdings officials in Saudi Arabia, such as getting investments from OFWs, are governed by Saudi law. Any aggrieved or concerned OFW can institute a complaint with the Commercial Court of Saudi Arabia to recover the principal amount invested, as well as the cost of suit and attorney’s fees.
In the past years, various foreign holding company offices illegally doing business in Saudi Arabia were raided and their directors and employees tried and placed behind bars for violation of local commercial laws. The illegality arises from the lack of juridical existence of foreign companies to do business in Saudi Arabia. OFWs’ investments in Saudi Arabia are not protected by Philippine Laws.
In the Philippines soliciting funds from the general public without authority or license to do so is a violation of Article 315 of Revised Penal Code, or Swindling (Estafa). The provision states that any person who defrauds another “with unfaithfulness or abuse of confidence by misappropriating or converting, to the prejudice of another, money, goods, or any other personal property received by the offender in trust or in commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same, even though such obligation be totally or partially guaranteed by a bond; or by denying having received such money, goods, or other property shall be guilty of Swindling (Estafa).”
Presidential Decree No. 1689 increased the penalty for certain forms of swindling and estafa, which states:
• Whereas, there is an upsurge in the commission of swindling and other forms of frauds in rural banks, cooperatives, “samahang nayon (s), and farmer’s associations or corporations/associations operating on funds solicited from the general public;
• Whereas, such defraudation or misappropriation of funds contributed by stockholders or members of such rural banks, cooperatives, ‘samahang nayon (s)”, or farmers’ associations, or of funds solicited by corporations/associations from the general public, erodes the confidence of the public in the banking and cooperative system, contravenes the public interest, and constitutes economic sabotage that threatens the stability of the nation;
• Whereas, it is imperative that the resurgence of said crimes be checked, or at least minimized, by imposing capital punishment on certain forms of swindling and other frauds involving rural banks, cooperatives, “samahang nayon (s), farmers’ associations or corporations / associations operating on funds solicited from the general public;
• Any person or persons who shall commit estafa or other forms of swindling as defined in Article 315 and 316 of the Revised Penal Code, as amended, shall be punished by life imprisonment to death if the swindling (estafa) is committed by a syndicate consisting of five or more persons formed with the intention of carrying out unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in the misappropriation of moneys contributed by stockholders or members of rural banks, cooperatives, “samahang nayon (s),” or farmer’s associations, or funds solicited by corporations / associations from the general public.
OFWNet and OFW Holdings are registered in the Philippines and should solicit investments only from the Philippines where it is authorized to do so.
Whether their intentions are good or not is moot and academic. Nevertheless, they should stop soliciting further investments from Filipinos in Saudi Arabia and return the collected amounts to their respective owners.
• Greg Leynes is a certified public accountant based in Jeddah.
