The Day a Tech Startup Was Held Hostage from Within — And How JKNC Rebuilt It for the Global Stage
Neuravox Solutions Inc., a domestic stock corporation in the IT-BPM industry based in Cebu IT Park, began with bold ambition but lacked structural foresight. Formed by three co-founders without a shareholder agreement, compliance officer, or corporate housekeeping protocol, the company quickly fell into internal gridlock as disputes over control and profit rights emerged, jeopardizing operations, client trust, and investor interest. This corporate case study explores how JKNC intervened to deconstruct the impasse, enforce legal clarity through formal governance frameworks, and implement a globally aligned compliance system. From internal chaos to international readiness, Neuravox was rebuilt into a high-functioning, investment-grade tech firm with scalable infrastructure and defined leadership. A powerful example of how corporate structure isn’t optional—it’s foundational to sustainable innovation and global expansion.
CASE STUDIES
4/29/20253 min read
Featured MSME Profile
Business Type: Domestic Stock Corporation
Industry: IT-BPM (Business Process Outsourcing, SaaS Integration, Virtual Back Office)
Location: Cebu IT Park
Structure before JKNC: Registered by three co-founders with no shareholder agreement, no compliance officer, and no corporate housekeeping protocol.
This case study has been fictionalized and anonymized under the Data Privacy Act of 2012 (RA 10173).
The Story
Neuravox Solutions Inc. emerged as a rising star within Cebu’s thriving IT-BPM ecosystem. With an impressive portfolio of U.S. and Singaporean clients, a polished digital product, and a capable multilingual support team, the startup appeared to embody the blueprint for modern tech success. Yet beneath its promising exterior was a foundation built on personal trust rather than institutional safeguards.
The company’s founder and CEO, Elijah Navarro, launched Neuravox alongside two close friends. In their rush to build, they bypassed standard corporate formalities: there were no shareholder agreements, voting rights, corporate secretary, or documented board minutes—only verbal understandings and a handful of electronically signed PDFs. This lack of structure proved to be a critical vulnerability.
One of the co-founders, Paulo, exploited this oversight. Without Elijah’s knowledge, he falsified a General Information Sheet (GIS), naming himself as President. He appointed his cousin as Treasurer—without a board vote—and submitted these changes to the Securities and Exchange Commission as if they were legally ratified. Paulo went further by issuing fake stock certificates to his wife and brother-in-law, creating a duplicate BIR Official Receipt book, and diverting over ₱9 million in receivables from two international clients into a separate bank account.
“He didn’t just take our money. He almost erased me from my own company,” Elijah shared. The impact was swift and severe. Upon discovering the internal power shift, Neuravox’s top client immediately suspended payments, pending verification of legal ownership.
That night, Elijah turned to JKNC for urgent legal assistance. His message was clear: “Can you help me take back my company before we lose the entire client base?”
Hidden Problems Revealed
JKNC’s forensic audit uncovered:
Falsified officer elections, violating Section 25 of the Revised Corporation Code, which requires that the board elect corporate officers
Issued fake stock certificates without board approval or proper subscription procedures
No shareholder agreement, leaving the founder legally unprotected and exposed to internal disputes
Authorized duplicate official receipts under the guise of a fake board authority
Diverted receivables through unauthorized banking channels, bypassing company oversight
Disorganized corporate records, including the absence of a required stock and transfer book
JKNC’s Strategic Response
1. Emergency Legal & SEC Defense
Filed a formal fraud notification with the SEC and BIR
Requested invalidation of the last GIS due to procedural fraud
Submitted affidavits from founding shareholders confirming falsified officer appointments
Froze compromised bank accounts via board-certified injunction filings
2. Reconstitution of the Corporation
Held a Special Stockholders’ Meeting in compliance with SEC-approved notice procedures
Reinstated Elijah Navarro as President
Appointed a new Treasurer, vetted by an external auditor
Installed 3 external board members — 2 from Elijah’s advisory board, and 1 endorsed by JKNC
Designated JKNC as the official Corporate Secretary
3. Recovery of Operations
Notified all foreign clients using verified board documents and legal authorization
Filed for amnesty under SEC MC No. 2, s. 2023, to regularize delayed filings
Redirected receivables to validated accounts and initiated legal recovery for misappropriated funds
Rebuilt the stock ledger, reissued stock certificates, and notarized all corrected corporate documents
4. Governance System Installation
Established internal protocols for:
Officer elections
Shareholder registry
Digital voting and board minutes
Implemented a client verification system to prevent future bank account misdirection
Results & Transformation
President legally reinstated and formally recognized by the SEC
Fake officers removed from all official records and corporate filings
Receivables redirected, with 70% of diverted funds successfully recovered
Client relationships preserved, with legal trust fully reestablished
JKNC retained as Corporate Secretary, actively monitoring all future filings, officer elections, and internal governance systems
“We lost money. But JKNC helped us keep what matters — our clients, our name, and our future.”
– Elijah Navarro, President
Strategic Insight from JKNC
Startup fraud rarely appears as outright theft—it often begins as misplaced trust. When founders overlook proper governance, they unintentionally leave the door open for silent takeovers and internal power grabs. At JKNC, we specialize in closing those gaps, restoring rightful control, and building resilient boardrooms that withstand pressure and protect the vision they were meant to uphold.