MANILA - Malacañang on Friday welcomed the Court of Appeals’ decision upholding the Securities and Exchange Commission’s (SEC) ruling revoking the articles of registration of online news site Rappler for violating foreign ownership rules.
“The decision of the Court of Appeals affirms that the Securities and Exchange Commission (SEC) was correct to revoke Rappler's registration based on its previous investigation,” Presidential Spokesperson Harry Roque said in a statement.
“The decision likewise supports the Palace stance that this case does not involve press freedom, but the regulatory powers of the SEC.”
In a 72-page decision handed down on Thursday, July 26, the appellate court’s Special 12th Division ruled that “foreign equity restriction on mass media implies ‘zero’ foreign control” which “includes any appearance of control.”
The SEC ordered the revocation of Rappler’s registration in a decision issued on January 11 for violation of the Foreign Equity Restrictions in Mass Media enshrined in the 1987 Constitution, and enforceable through the Mass Media Law, Anti-Dummy Law, and the Foreign Investment Act.
The state regulator explained that over $1 million in Philippine Depositary Receipts Rappler Holdings Corporation sold to US-based Omidyar Network Fund LLC contain a provision wherein Rappler “is required to seek approval of the [Omidyar] PDR Holders on corporate matters.”
CA BRINGS CASE BACK TO SEC
Omidyar announced in February that it had donated its PDRs to 14 Rappler Filipino managers.
The appellate court said it was remanding Rappler’s case to the SEC for the determination of the legal effect of the “alleged supervening donation.”
Roque said the Palace is “confident that the SEC will be able to resolve the case with the same competence and objectivity as before.”
President Rodrigo Duterte had repeatedly slammed Rappler in his public speeches, calling the social news network “a fake news outlet” whose articles “are rife with innuendos and pregnant with falsity.”
In a statement, Rappler called the CA decision “wrong” as it stressed that Omidyar “never exercised its right to the allegedly questionable clause in its Philippine Depositary Receipt (PDR) and later even waived its right under that clause.”
Rappler also decried that “the SEC failed to apply its own rules and practices to Rappler."
"Worse, the SEC went against the mandate of the law by not giving Rappler an opportunity to amend or correct any perceived error before revoking its certificate of incorporation," it added.
It nonetheless welcomed the CA’s order for the SEC to reinvestigate the case, given Omidyar’s donation of its PDRs.