CA denies Rappler’s plea to reverse SEC ruling
The Court of Appeals (CA) ordered the Securities and Exchange Commission (SEC) to review the legal implications of Omidyar Network Fund donation of its 7,217,252 Philippine Depositary Receipts (PDRs) to the news website Rappler to determine if it is no longer controlled by foreigners.
In a 72-page decision, the CA’s Twelfth Special Division last July 26 denied the petition for review filed by Rappler Inc. and Rappler Holdings Corp. (RHC) against the SEC.
The court also directed the SEC to conduct an evaluation of the legal effect of the alleged supervening donation made by Omidyar Network of all its PDRs to the staff of Rappler Inc., thus remanding the case back to the SEC.
The CA had said this is a new development neither presented to and considered by the SEC special panel when it issued its investigation report last January nor the SEC full bench in rendering the assailed decision.
Rappler chief executive officer and executive editor Maria Ressa said the donation was made last Feb. 19.
The court said the SEC does not dispute that the issuance of the PDRs is not illegal per se since there were other corporations that issued PDRs in the past and were allowed by the SEC.
The SEC also reviewed the North Base Media Ltd. (NBM) PDR and found nothing illegal or irregular in its terms.
The appellate court added that, “in view of the donation made by Omidyar of all the Omidyar PDRs to the Rappler staff, the negative foreign control found objectionable by the SEC appears to have been permanently removed.”
This Court notes that the terms and conditions of the donation made by Omidyar were not discussed by petitioners in their reply.
The SEC, it added, should now evaluate the terms and conditions of the alleged “supervening donation” and its legal effect on the mitigating, if not curing, violation it found petitioners to have committed.
“If so, this may warrant a re-examination of the sanction of revocation of petitioners’ certificates of incorporation imposed by the SEC en banc in the assailed decision,” the CA added.
It was also pointed out that the SEC, in the past, pursued a policy that the revocation of certificate of registration should be the last resort.
Under its new policy, the SEC should first issue an order of suspension against a delinquent corporation that failed to comply with the reportorial requirements for five consecutive years.
Rappler had asked the CA to annul and set aside the SEC decision that ordered the revocation of Rappler’s Certificate of Incorporation after it reportedly found the mass media entity liable for violating the regulations on constitutional and statutory foreign equity restrictions in mass media.
Palace lauds CA decision
Malacañang maintained yesterday that there is no attempt to infringe on the freedom of the press after the CA decided to junk the petition of Rappler to reverse the ruling of the SEC to revoke the online news outfit’s business permit.
“The decision of the Court of Appeals affirms that the Securities and Exchange Commission was correct to revoke Rappler’s registration based on its previous investigation,” presidential spokesman Harry Roque Jr. said yesterday.
Roque said the CA’s decision should now allow the SEC to proceed with its recommendation against Rappler.
The Palace official negated insinuations that the SEC move is an attack on press freedom that followed President Duterte’s tirades against the online news site since he assumed office in 2016 – supposedly for its bias against the Chief Executive and his allies.