The Securities and Exchange Commission (SEC) has doubled down on its decision to shut down Maria Ressa’s news site, Rappler, for violating the constitutional ban on media foreign ownership.
Rappler’s abogado Francis Lim said in a virtual press conference Monday (November 22) that SEC upheld its decision ordering Rappler’s closure despite French-American billionaire Pierre Omidyar’s move to convert his Philippine Depository Receipts (PDR) investment in the website into a “donation.”
“Unfortunately, the SEC submitted a report to the Court of Appeals saying it (donation) has no effect without giving us the opportunity to comment on the effect. We made a very strong case there, and unfortunately, the SEC panel did not ask for our view before submitting its report to the Court of Appeals,” said Lim.
A month after getting its operating permit revoked for violating the anti-Dummy Law, the Corporation Code, and the Securities Regulation Code, Rappler held a press conference in February to thank Omidyar for his generosity in converting his $1.5 million PDR investment into a donation to the firm’s managers, namely:
1) Jennifer V. Chua
2) Marie Fel D. Dalafu
3) Stacy Lynne M. de Jesus
4) Lilibeth Socorro L. Frondoso
5) Glenda M. Gloria
6) Dominic Gabriel L. Go
7) Miriam Grace A. Go
8) Natashya Marianne L. Gutierrez
9) Maria Rosario F. Hofileña
10) Gemma B. Mendoza
11) Pauline Gel C. Occeñola
12) Libertad G. Pascual
13) Maria A. Ressa
14) Anne Louise B. Yosuico
In its January 2018 decision, the SEC panel – composed of Chairperson Teresita Herbosa and Commissioners Antonieta Ibe and Ephyro Luis Amatong – ruled as void the Omidyar PDR for being a “fraudulent transaction.”
The SEC also ordered the revocation of Rappler’s certificate of incorporation for being a “mass media entity that sold control to foreigners” and “existing for no other purpose than to effect a deceptive scheme to circumvent the constitution.”
Rappler ran to the CA in a bid to reverse the SEC’s decision. The latter, however, left it to the SEC to decide whether Omidyar’s donation would cure Rappler’s criminal offense.
SEC found “substantial evidence” that Rappler and its officials “intentionally created an elaborate scheme, upon which its receipt of over a million dollars from a foreign investor would be theoretically defensible.”
Rappler hatched its scheme to circumvent the Constitution from 2014 to 2015 when it created Rappler Holdings to issue derivatives to two foreign investors – NorthBase Media and Omidyar Network. SEC said Ressa held talks with Omidyar from October to November 201 and April 2014 onwards before Rappler Holdings was formed in December 2014.
Unlike Northbase Media, SEC said Omidyar inserted provisions in his PDR granting not only control to the eBay founder but also “financial returns through a pass-through arrangement without owning stock in the company.”
The SEC said Rappler’s biggest mistake was equating control with ownership of stock or management in the board. It said the website’s move to make it appear that its owners and management were Filipino on paper while granting control or influence over corporate policy to foreign investors via the PDR “is not a harmless circumvention.”