CITICAPITAL Inc.

OTE

Mtee

UA\R 3! PI2: 19

SEC Building, EDSA, Greenhills, Mandaluyong City SECURITIES & EXCHANGE COMMISSION OFFICE OF THE GENERAL COUNSEL Republic of the Philippines

In the Matter of :

CITICAPITAL INC: For: Issuance of Cease and CED Case No. 03-2760 Desist Order

CEASE AND DESIST ORDER

2004 this Commission, for the issuance of a Cease and Desist Order against Citicapital Inc. offering, soliciting or otherwise selling securities in violation of Section 8.1 of R.A 8799 or the Securities Regulation Code (SRC). (hereinafter,"Citicapital"), enjoining respondent corporation to cease and desist from filed by the Compliance and Enforcement Department (hereinafter, "CED") of Pending consideration before the Commission is the Motion dated March 22.

The factual background are as follows:

93-03782 issued on May 18, 1993.On November 5, 2002, Citicapital filed a shares to more than nineteen persons. registration statement (RS) with the Corporation Finance Department (CFD) : of this January 2003, the said stockholders resold their preferred shares to more than:nineteen: auditors by respondent corporation. Citicapital also' admitted that they sold preferred Commission. Pending the approval of the RS, or in December 2002, its preferred shares to its five (5) majority stockholders, each with 11,500 shares.. In (19) persons. The audit yielded a schedule of investors which was voluntarily provided the SEC Citicapital is a duly registered corporation with SEC Registration Number ASO. The CED conducted an audit investigation on respondent corporation. Citicapital sold

them a fine of One Million Four Hundred Ten Thousand Pesos (P1,410,000.00),".which to date, has not yet been complied with. On August 11, 2003, the CED sent a Deficiency Notice to Citicapital assessing

registration statement of citicapital due to its failure to comply with the requirements of SRC Rules 8 and 12. On February 2, 2004, the SEC, after due notice and hearing, rejected the

the public. Thus, this must be restrained if only to protect the innocent investing public. requisite registration and permit may cause grave and irreparable injury and prejudice to The continued offering and sale of said securities by the respondent without the

DESIST, under pain of contempt, from further offering, soliciting or otherwise selling securities to the public until the requisite registration statement is duly filed and approved representatives, conduits, assigns and any and all persons claiming and acting for and in its behalf and under its authority are hereby ordered to immediately CEASE AND by the SEC and the corresponding permit to offer/sell securities is issued and to SHOW CAUSE within a non-extendible period of five (5) days from receipt hereof, why the Cease and Desist Order should not be made permanent. PREMISES CONSIDERED, Citicapital, its officers, directors,agents,

five (5) days from receipt hereof, stating therein whether the corporation is willing to enter into a settlement offer and would opt for summary procedure. request for the lifting of this Cease and Desist Order within a non-extendible period of Pursuant to SEC Circular No. 4, series of 2001, Citicapital may file a formal

also has jurisdiction over subject corporation for its information and appropriate action. Let a copy of this Order be furnished the Corporate Finance Department which

SO ORDERED.

30 March 2004

Mandaluyong City, Philippines.

For the Cc iCt n En Banci

VERNETTE UMALI-PACC General Counsel