THE Securities and Exchange Commission (SEC) has affirmed its decision revoking the certificates of incorporation of Rappler Inc. and Rappler Holdings Corp. (RHC) for violating the restrictions on foreign ownership in mass media.
The SEC, in its June 28, 2022 ruling, reiterated that the news organization violated the restrictions on foreign ownership in mass media. The order was signed by SEC chairperson Emilio Aquino, and Commissioners Javey Paul Francisco, Kelvin Lester Lee, Karlo Bello, and McJill Bryant Fernandez.
“To recall, the Commission en Banc, in a decision issued on January 11, 2018, found Rappler liable for violating the constitutional and statutory foreign equity restrictions in mass media when it issued questionable Philippine Depositary Receipts (PDRs) that granted Omidyar Network, a foreign entity, control over the media organization,” it said.
“The PDRs included a provision requiring the Filipino stockholders of Rappler to seek the approval of Omidyar Network on fundamental corporate matters, a violation of the absolute constitutional and statutory prohibition on foreign control of mass media,” it added.
The SEC said it revoked the certificates of incorporation of Rappler, being the mass media entity that sold control to foreigners, and of RHC, being an alter ego that existed for no other purpose aside from effecting a scheme aimed at masking the former’s constitutional violation.
The SEC also declared the PDRs void based on the provisions of the Securities Regulation Code (RA8799), being “a fraudulent transaction” within the ambit of the law.
In its order, the Commission said “the (shutdown) order is now warranted considering that the 2018 decision of the Court of Appeals (CA) has already attained finality” as it directed its company registration and monitoring department to effect the revocation of Rappler’s certificates of incorporation.
In a statement, Rappler said: “We were notified by our lawyers of this ruling that effectively confirmed the shutdown of Rappler… We are entitled to appeal this decision and will do so, especially since the proceedings were highly irregular.”
“We have existing legal remedies all the way up to the highest court of the land. It is business as usual for us since, in our view, this is not immediately executory without court approval,” said Rappler in a statement.
At a virtual press conference, Rappler legal counsel Francis Lim said the SEC shutdown order can yet be implemented because Rappler has 15 days to file a petition for review before the Court of Appeals.
“It’s a possibility that (the SEC can implement its order while we appeal to the court) but based on our study, the SEC cannot enforce this decision pending appeal,” said Lim.
Lim stressed that the ruling “is not final.” “Fortunately for us, we have legal remedies available to question the decision before our courts of law. So, rest assured that we will do so on behalf of the Rappler Group, and we are confident that at the end of the day we shall prevail,” he said.
He insisted that Rappler’s issuance of PDRs does not equate to ownership of shares of stocks in the company. “We do not admit that the ownership of the PDRs by the foreigners equates to equity interest in the Rappler Inc. and Rappler Holdings,” he said.
“I came from the Stock Exchange, there is a very big difference between depositary receipts and shares of stocks. That’s one area of contention,” he added.
“We have plans A through Z. Our goal is to continue holding the line, we’re not gonna voluntarily give up our rights, and we really shouldn’t. Absolutely we will continue to operate business as usual,” said Rappler CEO Maria Ressa.
Reacting to the SEC decision, Sen. Risa Hontiveros said it is “deplorable that this (Duterte) administration continues to find ways of threatening legitimate new organization not to exercise press freedom.”
Hontiveros said she finds it odd that registered news outfits are being “crushed” but the government gives accreditation to “internet journalists” to cover the day-to-day important events in the government.
“We need critical, honest, and facts-based journalism. I will always fight for freedom of the press. Silencing important media voices like Rappler, and ABS-CBN before it, not only affects the flow of information for the day. These assaults on independent press and other perceived ‘threats’ also chip away at our democracy,” Hontiveros said.
Sen. Aquilino Pimentel III said Rappler can still seek legal remedy to stop its closure. “If they can get a TRO from a court higher than the SEC then the order can be stopped or held in abeyance. We should follow court processes and hierarchy,” Pimentel said. — With Raymond Africa
