Rappler: SEC didn’t follow rules of procedure
Multimedia news website Rappler said that they would challenge in court the Securities and Exchange Commission’s (SEC) order revoking its license to operate.
Rappler CEO and executive editor Maria Ressa on Monday said they are not closing, adding that their lawyers were preparing the next steps.
“The speed at which this has happened and the kinds of attacks that media in general has gone through shows a political nature of this decision. And we will be challenging this to court,” Ressa said in a press conference.
Ressa said that the SEC did not give the news organization due process.
“The SEC did not follow the rules of procedure. They did not follow due process. The en banc issued order to shut us down without giving us an [opportunity] to respond,” Ressa said.
The SEC ruled that Rappler, Inc. and its controlling shareholder Rappler Holdings Corp. 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.”
“This case began in August and within five months we have a decision with steps missing in the process,” she said.
Ressa said that Omidyar Network, an international philanthropic investment firm founded by eBay founder Pierre Omidyar, holds 5.5% of Rappler’s total PDR.
(PDRs refer to derivative instruments which are based on the value of equities as underlying assets but don’t grant ownership to the holder. In Rappler’s case, however, the SEC argued that the PDRs issued to Omidyar gave the foreign entity sufficient control even without having actual ownership.)
Northbase Media, which was founded by former journalists including a former Reuters COO, also holds PDRs from Rappler. Collectively, Omidyar Network and Northbase Media hold 9.2% of Rappler’s PDRs.
Ressa explained that they “submitted the PDRs and they were accepted by the SEC in 2015. Now, these PDRs are not acceptable.”
Maria Ressa, who founded Rappler in 2012 together with veteran women journalists, said that they “went outside” because they are “fiercely independent.”
“What we felt, given the political environment, we didn’t want to be influenced by any business in the Philippines. We felt that getting PDRs, which don’t give any ownership and control, would give us the ultimate independence,” she said.
The former CNN bureau chief stressed that this decision was political in nature and that they will fight it.
“We stand tall. We stand firm. This is a moment that we will say we stand for press freedom,” she said.
Chay Hofileña, acting managing editor, said that the PDRs allowed them to be editorially independent.
“We needed capital. We thought of doing PDRs because ABS-CBN has that, GMA has that, PLDT has that so it’s nothing new. It’s a template already that we followed. There’s no violation there,” Hofileña said.
She emphasized that the PDRs did not entitle the foreign investors a say in their daily operations and on the stories that they produce.
“They have no say. They can’t tell us you’re not supposed to run this story or you should run this story. No interference at all in editorial. That’s the difference,” she said.
She added: “If you’re a shareholder or investor that’s where you have a say, you’re part of the board, you vote in certain issues that can influence day-to-day operation and editorial but not so with PDRs.” – je/ac
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