CA upholds SEC order vs Rappler

The decision of Rappler’s American investor to donate its $1.5-million investment to the Filipino managers of the online news website may have already rectified its violation of the constitutional ban on foreign ownership of mass media, the Court of Appeals (CA) ruled on Thursday.

But the appeals court’s Special 12th Division also affirmed the Jan. 11 decision of the Securities and Exchange Commission (SEC) revoking Rappler’s registration for violating the Foreign Equity Restrictions in Mass Media enshrined in the 1987 Constitution.

Malacañang welcomed the court’s ruling, saying it affirmed “the SEC was correct to revoke Rappler’s registration based on its previous investigation.”

Palace stance

“The decision likewise supports the Palace stance that this case does not involve press freedom, but the regulatory powers of the SEC,” presidential spokesperson Harry Roque said.

The SEC said that the more than $1 million in Philippine depositary receipts (PDR) that Rappler Holdings Corp. sold to US-based Omidyar Network Fund contained a provision in which Rappler was required “to seek [the] approval of PDR holders on corporate matters.”

PDRs are derivative instruments based on the value of equities as assets that do not grant ownership to the holder.

The appeals court remanded the case back to the SEC and directed it to review its decision following Omidyar’s donation of its PDR holdings to Rappler’s 14 Filipino managers in March.

Permanently removed

“In view of the donation made by Omidyar of all [its] PDR to the Rappler staff, the negative foreign control found objectionable by the SEC appears to have been permanently removed,” the appeals court said.

Associate Justice Rafael Antonio Santos penned the ruling, which was concurred in by Associate Justices Apolinario Bruselas Jr. and Germano Francisco Legaspi.

Rappler founder and chief executive officer Maria Ressa maintanied that they did not violate the law in conducting their operations and that Rappler’s predicament was mainly due to its critical coverage of the Duterte administration.

Asked if she was hopeful that the SEC would eventually reverse its decison, she replied: “I leave it to the SEC. I continue to hope for the best and at the same time, we will hold the line.”

President Duterte had described the online website as a “fake news outlet.”