MANILA, PHILIPPINES — On Tuesday night, the Securities and Exchange Commission (SEC) affirmed the shutdown order against Rappler due to administrative penalties of Rappler, Inc. and Rappler Holdings Corp. (RHC). Rappler CEO Maria Ressa announced the news Wednesday morning during the East-West Center international media conference in Hawaii.
SEC released an official press release early today, June 29, that reads, “The Securities and Exchange Commission (SEC) confirms the issuance of an order dated June 28, 2022, affirming the revocation of the certificates of incorporation of Rappler, Inc. and Rappler Holdings Corporation (RHC)for their violation of constitutional and statutory restrictions on foreign ownership in mass media.”
On January 11, 2018, SEC declared the Philippine Depository Receipts (PDRs) issued to American firm Omidyar Network (ON) by Rappler and RHC void since this violated Section 71.2 of the Securities Regulation Code, among others.
A PDR is used by a local firm as an investment instrument in which domestic and foreign investors may place their funds.
SEC reported that RHC sold 7,217,257 PDRs to Omidyar Network Fund LLC, an investment vehicle created by eBay founder and entrepreneur Pierre Omidyar.
The following month, on February 28, 2018, ON said that it donated its PDRs to 14 Rappler managers.
However, “the donation did not cure the violation of Rappler, Inc. and Rappler Holdings Corporation of Article XVI Section 11(1) of the Constitution and PD (Presidential Decree) No. 1018,” said the commission.
Article XVI Section 11(1) of the Constitution states that “the ownership and management of mass media shall be limited to citizens of the Philippines.” Meanwhile, PD No. 1019 limits the ownership and management of mass media to citizens of the Philippines and for other purposes.
“The fact that the Waiver was issued only during the pendency of the proceedings with the Commission clearly showed that its execution was merely an afterthought, and made for no other purpose than to make it appear and convince the Commission (and the CA) that Omidyar will not exercise control over Rappler even if the same was granted in the ON PDRs,” the Commission added.
For more information about SEC’s recent decisions, you may visit their official Press Release on their website.
Rappler posted on its social media accounts in response to the decision saying, “We are entitled to appeal this decision and will do so, especially since the proceedings were highly irregular.”
RAPPLER STATEMENT— Rappler (@rapplerdotcom) June 29, 2022
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 Holdings Corporation. #HoldTheLine #CourageON
Also read: PNP urges cities near Metro Manila to declare June 30 a holiday
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