MANILA – In a move unheard of in nearly four decades, the Securities and Exchange Commission (SEC) revoked the registration of news organization Rappler for allegedly violating the Philippine Constitution and the Anti-Dummy Law.
The SEC said Rappler violated constitutional restrictions on ownership and control of mass media entities because of funds coming from Omidyar Network, a fund created by eBay founder and entrepreneur Pierre Omidyar.
“The En Banc finds Rappler, Inc. and Rappler Holdings Corporation, a Mass Media Entity and its alter ego, liable for violating the constitutional and statutory Foreign Equity Restriction in Mass Media, enforceable through laws and rules within the mandate of the commission,” the SEC en banc said in its decision dated January 11 but published on its website Monday, January 15.
SEC voided the Omidyar Philippine Depositary Receipt (PDR) and revoked Rappler’s Certificate of Incorporation. A PDR is a financial instrument that does not give the owner voting rights in the board or a say in the management or day-to-day operations of the company. Several large media companies have PDRs.
The SEC itself accepted the Omidyar-related documents submitted by Rappler in 2015.
In a statement addressed to its readers and viewers on Monday, Rappler said: “The SEC’s kill order revoking Rappler’s license to operate is the first of its kind in history – both for the Commission and for Philippine media.”
Rappler has already issued a statement in response to this action, condemning it as an assault on press freedom. “What this means for you, and for us, is that the Commission is ordering us to close shop, to cease telling you stories, to stop speaking truth to power, and to let go of everything that we have built – and created – with you since 2012,” the statement read. “All because they focused on one clause in one of our contracts which we submitted to – and was accepted by – the SEC in 2015.”
The statement continues, “Now the Commission is accusing us of violating the Constitution, a serious charge considering how, as a company imbued with public interest, we have consistently been transparent and above-board in our practices. Every year since we incorporated in 2012, we have dutifully complied with all SEC regulations and submitted all requirements even at the risk of exposing our corporate data to irresponsible hands with an agenda.Transparency, we believe, is the best proof of good faith and good conduct.”
This action has also already made international headlines as publications like The New York Times, Agence France Presse, and The Guardian have posted the news on their respective websites and social media accounts.
For its part, the National Union of Journalists of the Philippines (NUJP) has expressed its support for Rappler while condemning the SEC. “The SEC has apparently decided to reject Rappler’s contention that its foreign investors merely placed money in the outfit but do not own it, which it issued after President Rodrigo Duterte, in his state of the nation address last year, threatened to have its ownership investigated,” their statement read in part.
It has also been revealed that it was the Office of the Solicitor General (OSG) that initiated the action to have Rappler investigated.
“The Commission En Banc received a letter dated 14 December 2016 from the Office of the Solicitor General requesting an investigation into Rappler, and Rappler Holdings Corporation for any possible contravention of the strict requirements of the 1987 constitution,” the SEC said in its 29-page decision.
Two months later, the SEC summoned Rappler through a Notice to Conference where the company furnished the commission a copy of its Philippine Depositary Receipt (PDR).
In a statement, Solicitor General Jose Calida said he ‘applauded’ the SEC decision.
“Even influential media outfits cannot skirt restrictions set forth in the Constitution. Rappler is free to seek redress before our courts. OSG is ready to defend the SEC Decision in any forum,” Calida said.
Meanwhile, Rappler Chief Executive Officer Maria Ressa has said that she is ready to face arrest should things come to a head.
