(Eagle News)–The Court of Appeals has junked the petition for review filed by online news site Rappler Inc. and Rappler Holdings Inc. against the decision of the Securities and Exchange Commission to revoke their certificate of incorporation.
In a 72-page decision, the CA Special 12th Division denied the SEC had committed grave abuse of discretion when it made the revocation for what it said were Rappler Inc.’s and Rappler Holdings Inc.’s violation of the Constitution and foreign-equity restrictions in mass media.
“Accordingly, the court rules that in the present case, a substantial compliance with the requirements of due process was observed by the SEC,” the division said.
The division also ordered the SEC to “conduct an evaluation on the legal effect of the alleged supervening donation made by Omidyar Network of all its Philippine Depositary Receipts to the staff of Rappler Inc.”
The decision was penned by Justice Rafael Antonio Santos and concurred in by Justices Apolinario Brussels Jr. and Germano Francisco Legaspi.
In a decision dated January 11, 2018, the SEC ordered the revocation of the articles of incorporation of Rappler, Inc. and Rappler Holdings Corporation, noting they were “liable for violating the constitutional and statutory Foreign Equity Restrictions in Mass Media enforceable through rules and laws within the mandate of the Commission” when they sold Philippine Depository Receipts to foreign entities, Omidyar Network and North Base Media.
The SEC ruled the companies had committed “a species of Securities Fraud” and violated Section 1 of the Commonwealth ACT 108, or the Anti-Dummy Act.
“This may include a situation where a person allows disqualified foreigners to obtain a derivative that grants a measure of control over corporate matters, especially where the Constitution is very clear that there must be no foreign control whatsoever,” the SEC said.
“Anything less than one hundred percent (100%) Filipino control, as stockholder or through any other means, is a violation,” it added.
