MANILA — Justice Secretary Vitaliano Aguirre II ordered the review of the Securities and Exchange Commission (SEC) decision revoking the certificate of incorporation of online news website Rappler for violating foreign ownership restrictions on mass media.
“I have directed my legal staff to study the legal issues of this case,” Aguirre told reporters when sought for a comment.
Aguirre said the DOJ probe would cover possible criminal liabilities of executives of the online media entity.
Asked if the probe would include criminal aspects, Aguirre answered “yes, it will cover all angles.”
In a decision issued Monday, the SEC cancelled the registration of Rappler, Inc., the mass media entity that “sold control” to foreigners, and Rappler Holdings Corporation being its alter ego, “existing for no other purpose than to effect a deceptive scheme to circumvent the Constitution.”
It cited foreign equity restriction in the Constitution, Presidential Decree and the Securities Regulation Code that provide that “the ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations or associations wholly owned and managed by such citizens.”
The SEC En Banc also declared Omidyar Philippine Depository Receipts (PDR) void for “being a fraudulent transaction within the ambit of Section 26.1 of the Securities Regulation Code.”
In October 2015, Rappler Holdings Corp. issued 7,217,257 PDRs covering shares of Rappler Inc. designated as ON PDRs because they were sold to Omidyar Network Fund LLC, a foreign juridical entity.
Rappler Holdings publicly reported that it received an investment from Omidyar Network LLC.
It also issued PDRs covering shares of Rappler Inc. to NBM Rappler L.P., a foreign juridical entity. NBM Rappler L.P. was founded and co-owned by North Base Media Ltd., a foreign juridical entity.
The body conducted its investigation upon the request of the Office of the Solicitor General (OSG) in December 2016.
The body conducted its investigation upon the request of the Office of the Solicitor General (OSG) wrote the agency in December 2016.
Solicitor General Jose Calida said he asked the SEC to probe Rappler after reading the newspaper articles of former ambassador to Cyprus and Greece Rigoberto Tiglao, who disclosed in October 2016 that two American companies, Omidyar Network, Inc. and North Base Media, in 2015 “made substantial investments” in Rappler.
He added that Malacañang had no involvement in his request SEC to investigate Rappler.
“Definitely not. Siguro kilala niyo naman ako (You know me). I do things on my own. I do not take orders from anyone,” Calida told reporters on Tuesday ahead of the oral arguments on the petitions against the Mindanao martial law extension at the Supreme Court.
Calida said the decision of the SEC to revoke the incorporation papers of the online news site was about following the “rule of law.”
“If you engage in the business of mass media you have to comply with the constitutional and statutory regulations because no one is above the law, even a powerful media. This is about the rule of law,” Calida told reporters when asked to react on journalist groups’ concerns that the decision was an attack on press freedom.
“If you read the SEC decision, it’s not just ownership but control. There must be no control, not even one percent. It should be zero percent,” he added.
Calida lauded the SEC’s move, stating that this shows that “even influential media outfits cannot skirt the restrictions set forth in the Constitution”.
He said Rappler is free to seek legal remedy, noting that his office is ready to defend the SEC ruling in any forum.
On Monday, Malacanang said it respects the decision of the SEC to revoke the certificate of incorporation of Rappler.
“We respect the SEC decision that Rappler contravenes the strict requirements of the law, that the ownership and the management of mass media entities be wholly-owned by Filipinos,” Presidential Spokesperson Harry Roque said in a press statement.
Roque said the SEC was empowered to determine the legality of corporations in the country.
“Rappler may wish to exhaust all available legal remedies until the decision becomes final,” he said. PNA
