Gov't shuts down Rappler

THE Securities and Exchange Commission (SEC) en banc has effectively ordered the closure of news website Rappler by revoking its registration.

In a ruling issued Thursday, January 11, the commission en banc said Rappler Inc. and its parent Rappler Holdings Corp. sold control to foreigners, thus violating the constitutional and statutory foreign equity restrictions in mass media.

As administrative penalty, the commission revoked the Certificate of Incorporation of both Rappler and Rappler Holdings. The commission also declared void the Philippine Depositary Receipts (PDRs) issued to Omidyar "for being a fraudulent transaction."

In a statement, Rappler said it will "not only contest this through all legal processes available to us, but also to fight for our freedom to do journalism."

The SEC said a special panel that it created in July 2017 to conduct an in-depth investigation of Rappler found that the news website is being funded and controlled by eBay founder and entrepreneur Pierre Omidyar. Rappler, however, denied the SEC's claim. "Philippine Depositary Receipts (PDRs) do not indicate ownership. This means our foreign investors, Omidyar Network and North Base Media, do not own Rappler," said Rappler.

"They invest, but they don't own. Rappler remains 100-percent Filipino-owned," it added.

Rappler Holdings, which owns 98.84 percent of Rappler, issued in 2015 a total of nearly 20 million PDRs to Omidyar Network and NBM Rappler, both foreign entities. NBM Rappler is co-founded by North Base Media.

Under the Foreign Investments Act, mass media should be 100-percent Filipino-owned.

Earlier, President Rodrigo Duterte accused Rappler of being fully owned by a foreign businessman.

In a statement, Presidential Spokesperson Harry Roque Jr. said Malacañang respects the decision of the SEC.

He said the SEC has the authority to determine whether Rappler is legible or not to secure registration from the commission.

“The Securities and Exchange Commission is empowered to determine the legality of corporations,” Roque said.

“We respect the SEC decision that Rappler contravenes the strict requirements of the law that the ownership and the management of mass media entities must be wholly-owned by Filipinos,” he added.

Rappler, which usually features news stories against the Duterte administration, admitted that it did not anticipate that SEC would come up with a decision against its company, saying that it had “acted in good faith and adhered to the best standards in a fast-evolving business environment.”

It also described the SEC’s order as “pure and simple harassment.”

Roque said Rappler may exhaust all legal actions to contest the directive of SEC to shut down its operations.

“Rappler may wish to exhaust all available legal remedies until the decision becomes final,” he said. SunStar Philippines