The Security and Exchange Commission (SEC) has affirmed its order to shut down the online news organization Rappler, Inc. and Rappler Holdings Corporation (RHC) for violating the restrictions on foreign ownership in mass media.
This was revealed by Rappler CEO Maria Ressa during her speech at the East-West Center international media conference in Hawaii.
"In an order dated June 28, our Securities and Exchange Commission affirmed its earlier decision to revoke the certificates of incorporation of Rappler Inc. and Rappler Holding Corporation," Rappler said in a statement.
"We were notified by our lawyers of this ruling that effectively confirmed the shutdown of Rappler," it added.
In a statement released hours after, SEC confirmed the issuance of an order dated June 28, 2022, affirming the revocation of the certificates of incorporation of the two companies.
"Accordingly, the SEC revoked the certificates of incorporation of Rappler, being the mass media entity that sold control to foreigners, and of RHC, being an alter ego that existed for no other purpose aside from effecting a scheme aimed at masking the former’s Constitutional violation," the commission stated.
In January 2018, the SEC revoked the certificates of incorporation of Rappler and RHC for violating the constitutional and statutory foreign equity restrictions in mass media when it issued Philippine Depositary Receipts (PDRs) that granted Omidyar Network, a foreign entity, control over the media organization.
The PDRs included a provision requiring the Filipino stockholders of Rappler to seek the approval of Omidyar Network on fundamental corporate matters, a violation of the absolute constitutional and statutory prohibition on foreign control of mass media.
Rappler appealed SEC’s decision before the Court of Appeals. They argued that PDRs do not give foreign ownership rights and the news organization is owned and managed by Filipinos. It also said that PD 1018 only applies to "print and broadcast media."
However, in its latest statement, SEC said that the "purported donation of the PDRs to the staff of Rappler neither created nor transferred any right in favor of the donees which would mitigate or cure the violation already committed."
Ressa said Rappler will appeal the decision and it is "business as usual" in the news organization.
"We have existing legal remedies all the way up to the highest court of the land," the statement added.
"It is business as usual for us since in our view, this is not immediately executory without court approval."
