Palace says Rappler still banned even after US investor’s donation

Presidential spokesperson Harry Roque on Thursday said Rappler reporters were still barred from covering events in Malacañang even after an American investor donated its $1.5-million investment in the online news site to 14 of its Filipino managers.

Roque said Omidyar Network’s donation was an admission that Rappler had violated the constitutional restrictions on foreign ownership and control of mass media in the Philippines.

He also said it boosted the Securities and Exchange Commission (SEC) decision in January to revoke Rappler’s license to operate.

The SEC voided the Philippine depositary receipts (PDRs) issued by Rappler to Omidyar Network, citing provisions giving the US investor “negative control” over the online news site. It also accused Rappler of colluding to become a dummy.

PDRs refer to derivative instruments that 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 said the PDRs gave Omidyar Network sufficient control even without having actual ownership.

Omidyar Network

On Wednesday, Stephen King, a partner at Omidyar Network, the philanthropic arm of eBay founder Pierre Omidyar, said the donation “completely eliminates the sole basis of the SEC ruling,” which he described as an attack not only on Rappler “but also on independent journalism and press freedom in the Philippines.”

“We’re happy that they admitted [it], because now we can say even Rappler now admits they’re not victims of censorship, they’re not victims of infringement of press freedom,” Roque said in a press briefing.

“It strengthens the decision of the SEC because it’s an acknowledgment that they violated the Philippine Constitution no less, and they’re hoping to rectify it,” he added.

Asked whether the ban on Rappler remains, Roque replied: “Of course.”

Malacañang has barred Rappler’s reporter Pia Ranada from covering events in the Palace, with officials citing the SEC’s revocation of its registration as justification.

Later, Roque said Ranada was barred from the Palace also because President Duterte was annoyed with her.

Malacañang also accused Rappler of producing “fake news” with its report on the alleged intervention of the President’s senior aide, Christopher “Bong” Go, in choosing the combat management system for the Navy’s new frigates.

SEC statement

In a statement on Thursday, the SEC said the conversion of Omidyar Network’s investment into a donation must be presented “through an appropriate pleading or manifestation” to the Court of Appeals where Rappler had petitioned that the corporate regulator’s decision be overturned.

“To date, we are unaware of any such pleading or manifestation officially conveying this information to the Court of Appeals and for what specific relief,” the SEC said.

The SEC said it would look at this new event “to determine its next action before the Court of Appeals and to ensure the fulfillment of its duty of enforcing the constitutional restrictions on nationalized activities such as mass media.”

Rappler has insisted that it is owned, managed and controlled by Filipinos and its lawyer, Francis Lim, said Omidyar Network’s donation was “not legally necessary.”

However, the donation “puts beyond doubt that Rappler is owned and controlled by Filipinos,” Lim said.

“The government should now leave Rappler unhindered in the name of press freedom,” he said in a text message.

Asked how the recipients of the donation would settle the donation tax, Lim said: “Omidyar undertook to pay for it.”