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BY PRINCE GOLEZ
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January 16, 2018
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MANILA – The Securities and Exchange Commission (SEC) ordered the revocation of Rappler’s certificate of incorporation as the online news organization allegedly violated ownership laws.
Rappler, Inc. and its controlling shareholder, Rappler Holdings Corp., violated “the constitutional and statutory Foreign Equity Restrictions in Mass Media enforceable through rules and laws within the mandate of the Commission,” the SEC en banc said.
The news organization regarded the SEC ruling as “pure and simple harassment.”
It has fully complied with all SEC regulations since its founding in 2012, “even at the risk of exposing our corporate data to irresponsible hands with an agenda,” Rappler said.
The SEC said the news organization was getting funding from Pierre Omidyar, founder and chairman of online marketplace eBay.
“The foreign equity restriction is very clear. Anything less than 100 percent Filipino control is a violation,” the regulator said in a Jan. 11 decision.
“Conversely, anything more than exactly zero percent foreign control is a violation,” the SEC added.
CARRYING ON
Rappler planned to contest the SEC decision “through all legal processes available to us.”
“We’ve been through a lot together, through good and bad – sharing stories, building communities, inspiring hope, uncovering wrongdoing, battling trolls, exposing the fake,” the news website said in a statement.
It added: “We will continue bringing you the news, holding the powerful to account for their actions and decisions, calling attention to government lapses that further disempower the disadvantaged.”
Malacañang said it respects the SEC resolution.
The SEC “is empowered to determine the legality of corporations,” Presidential Spokesman Harry Roque said in a statement.
“We respect the SEC decision that Rappler contravenes the strict requirements of the law that the ownership and the management of mass media entities must be wholly owned by Filipinos,” Roque said.
“Rappler may wish to exhaust all available legal remedies until the decision becomes final,” he added.
ON PDRs
On Dec. 22, 2016, the SEC en banc received a letter from the Office of the Solicitor General requesting an investigation into Rappler “for any possible contravention of the strict requirements of the 1987 Constitution” on the issuance of Philippine depositary receipts (PDRs) to NBN Rappler LP and Omidyar Network Fund LLC. The commission then started investigating.
In the Jan. 11 resolution, the SEC declared as “void” the PDRs issued to Omidyar and cited these as a “fraudulent” transaction under the Securities Regulation Code.
Last year Rappler has insisted that it was “100-percent Filipino-owned even if the company uses Philippine depositary receipts to allow foreign partners to have commercial interests.”
“Omidyar Network and North Base Media, groups composed of international journalists and investors, have economic interests but own no part of Rappler,” the site said in a news article posted on July 24, 2017 – the day President Rodrigo Duterte delivered his second State of the Nation Address and railed against Rappler for the first time, claiming the organization was “fully owned by Americans.”
“PDRs are financial tools that individuals or entities can use to have a stake in a company they believe in,” Rappler said. “Their involvement is limited to potential commercial benefits. They neither get voting rights on the Board nor have a say in the management or day-to-day operations of the company.”/PN
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