Rappler asks CA to annul SEC decision to revoke its registration

Online news outfit Rappler on Monday asked the Court of Appeals (CA) to annul the decision of the Securities and Exchange Commission (SEC) revoking its corporate registration for alleged violation of the constitutional cap on foreign ownership of media entities.

In a 70-page petition for review, Rappler Inc. and Rappler Holdings Corp. told the CA that their rights to due process were violated when the revocation order was released without a formal charge which was a requirement under the commission’s rules.

“There was also no formal administrative action filed against Rappler and RHC before the SEC,” the petition read. “Without an administrative action, surely, no administrative action, including the suspension or revocation of the corporation’s franchise, could have been imposed by the SEC.”

“Since no administrative charge was instituted against Rappler and RHC, they were not provided with sufficient notice of the formal charge against them (because none was issued) and the opportunity to be heard,” it stressed.

The petitioners added that the SEC also erred in canceling Rappler’s certificate of incorporation and voiding the Omidyar Philippine Depository Receipts (PDRs).

“The Omidyar PDR does not confer upon Omidyar control, much less ownership and management, over Rappler. As such, the SEC has no basis to declare void the Omidyar PDR,” petitioners said.

“At most, Clause 12.2.2 of the Omidyar PDR is in the nature of a negative covenant put into place to protect the interest of Omidyar, as investor. This is why Omidyar’s approval is confined only to acts that may prejudice its rights under the Omidyar PDR,” they said, adding that there was no evidence showing that Omidyar exercised control over Rappler.

They added that Rappler could be covered by Presidential Decree 1018 – or the implementing law on the ban against foreign ownership of media entities – because it was “not engaged in the business of mass media.”

“All in all, Rappler is not engaged in the business of ‘mass media’ as contemplated by Section 11 (1) of Article VI of the Constitution and cannot be held accountable under it,” as it pointed out that Rappler is at its own kind as the Philippines’ first “all-digital news organization.”

It added that despite its relationship with the administration of President Rodrigo Duterte, it is still entitled to the right to freedom of the press.

“Judicial intervention is necessary to prevent a blatant exercise of prior restraint,” the petition stated. /atm