The Philippine government has revoked the operating license of leading news website Rappler, officials said, in a ruling denounced by President Rodrigo Duterte’s critics as another blow to press freedom. / AFP PHOTO / TED ALJIBE
(Eagle News) — The Office of the Solicitor General lauded the Securities and Exchange Commission for revoking the certificate of incorporation of online news website, Rappler, and said that it was ready to defend this decision “in any forum.”
In a statement, Solicitor General Jose Calida said that this ruling of the SEC showed that no one is exempted from following the law, not even influential media organizations.
“I applaud the SEC for revoking Rappler’s certificate of incorporation. This Decision demonstrates that even influential media outfits cannot skirt the restrictions set forth in the Constitution,” Calida said.
He said that Rappler is “free to seek redress before our courts.”
“The OSG is ready to defend the sound decision of the SEC in any forum,” he added.
Rappler executives, particularly Rappler CEO Maria Ressa and Rappler acting managing editor Chay Hofilena, held a press conference shortly after the SEC made public its decision revoking its business license.
Rappler claimed it will exhaust all legal means to question the SEC ruling, and alleged that it was nothing more than a blow to press freedom.
They claimed they were ready to question the SEC ruling up to the Supreme Court.
The Securities and Exchange Commission (SEC) said it had revoked the incorporation certificates of Rappler and Rappler Holdings Corp because they violated a provision in the Philippine constitution reserving media ownership to Filipinos.
“(Both are) existing for no other purpose than to effect a deceptive scheme to circumvent the constitution,” the SEC said in a January 11 ruling posted on its website Monday.
-Citing Constitution, SEC says mass media should be 100% owned and controlled by Filipinos-
The SEC cited the Foreign Equity Restriction enshrined in the Philippine Constitution that bars any form of ownership or control by foreign entities of Philippine mass media.
“The Foreign Restriction is very clear. Anything less than one hundred percent (100%) Filipino control is a violation. Conversely, anything more than exactly Zero Percent (0%) foreign control is a violation,” the SEC decision read.
The Foreign Equity Restriction is found in Article XVI Section 11(1) of the Constitution which provided that: “The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.”
The SEC also cited Section 2 of the Presidential Decree 1018, Limiting the Ownership and Management of Mass Media to Citizens of the Philippines.
It also cited the 2015 Implementing Rules and Regulations of the Securities Regulation Code, in its ruling, clarifying that “control” is not equated “with either ownership of stock or with management as director or officer.”
-Securities fraud –
It accused Rappler of committing what may be considered “a species of Securities Fraud” when it circumvented the foreign equity restrictions enshrined in the Constitution through a sale of securities to foreign entities, the Omidyar Network and North Base Media.
In its investigation, the SEC found that Rappler and its holdings company, Rappler Holdings Corporation, issued Philippine Depository Receipts (PDR) to the foreign entities North Base Media (NBM) thru NBM Rappler, LP, and Omidyar Network.
The investigation showed a certificate of Registration of Expanded Limited Partnership, issued in the Cayman Islands to NBM Rappler, L.P.
The SEC investigation also found a certification of partnership interest issued in the Cayman Islands to NBM Rappler, LP, as well as a Certificate of Formation issued in Wilmington. Delaware, USA to Omidyar Network Fund LLC.
In 2015, Rappler Holdings Corporation issued 264,601 PDRs to NBM Rappler, LP on May 29, 2015; another 11,767,117 PDRs to NBM Rappler, LP on July 29, 2015; and more than 7 million PDRs (7,217,257 PDRs) to Omidyar Network Fund LLC.
SEC said Rappler also violated Section 1 of the Commonwealth ACT 108, or the Anti-Dummy Act, which penalizes any citizen of the Philippines who allows his name or citizenship to be used for the purpose of evading constitutional or legal provisions whoch require Philippine or any other specific citizenship as a requisite for the enjoyment of a right, franchise or privilege.
“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 noted in its ruling.
“Anything less than one hundred percent (100%) Filipino control, as stockholder or through any other means, is a violation,” it explained.
(Eagle News Service)
