Securities and Exchange Commission to study Rappler investor’s move to donate investments

MANILA, Philippines — The Securities and Exchange Commission (SEC) will study the latest move of Omidyar Network to donate its investments in online news network Rappler to determine the impact on the corporate regulator’s earlier ruling on the media entity.

Omidyar on Wednesday announced that it has donated its Philippine Depositary Receipts (PDRs) to 14 Filipino managers of Rappler to address the unwarranted ruling made by the SEC.

Sought for comment, SEC chair Teresita Herbosa said the SEC needs to look into this.

“We will be studying this because the case is already with the Court of Appeals and the CA has the authority to pass upon this development,” Herbosa said.

She said that “supervening events during appeal, whether it is a ground for withdrawal, dismissal, rendering moot and academic or continuance of appeal, is for CA to pass upon. As party appellee, SEC will respond or give its position on such developments as may be ordered by the CA.”

SEC Commissioner Ephyro Amatong gave a similar comment.

Last January, the SEC ruled that Rappler violated the constitutional limits on foreign ownership in media after its PDRs issued to Omidyar gave the foreign company veto powers. It issued an order revoking Rappler’s certificate of incorporation. Rappler has filed an appeal before the CA.

PDRs are instruments which give foreign investors a passive economic interest in a Philippine company, but the SEC argued that the Omidyar PDRs issued by Rappler gave the foreign investor veto powers.

Thus, the SEC said Rappler violated the Constitution because where mass media is concerned, no control whatsoever may be granted to foreign investors.

“100 percent Filipino control means zero foreign control. Control is any influence over corporate policy and not limited to ownership of stock,” the SEC said.

“Rappler has already filed an appeal with the CA. If this information is correct, I would expect them to raise it before the CA and the CA will decide appropriately,” Amatong said.

Malacañang slammed Rappler anew for decrying the move of the SEC to revoke its license as infringement of press freedom when the online news site actually violated the Constitution.

Presidential spokesman Harry Roque made the point when Rappler’s foreign investor, Omidyar Network, moved to donate $1.5 million in PDRs to its Filipino managers.

He said Omidyar’s donation to its Filipino managers does not remove the fact that Rappler breached the Constitution.

“This latest act is nothing but a circumvention of the law, which restricts ownership of media entities in the country to 100 percent Filipino-owned,” Roque added.

The action of Omidyar Network and Rappler only showed that the SEC was right in its decision when it pointed out the online news site allowed a foreign entity to have a majority share of investment in the news site.

“That’s for the SEC to address. It’s an acknowledgement that they breached the Constitution and hence, they should not have cried infringement of freedom of the press,” Roque said.

The Palace official was asked to comment on the PDR donation. Rappler said the gesture proves that it has always been Filipino-owned and controlled.

The SEC decision prompted Rappler to cry foul over the government’s move, saying the Duterte administration was curtailing freedom of the press. 

The move came after President Duterte openly attacked Rappler, along with other news outfits deemed critical of the administration.

Taking cue from the Office of the President, the Presidential Security Group (PSG) banned the Rappler reporter assigned in Malacañang from covering the President and other Palace activities. 

Roque earlier said the President was offended by Rappler’s reports, which the Palace also described as “fake news.”  

The Rappler correspondent had lost Duterte’s trust, the presidential spokesman said at the height of the controversy.

In a report posted on its website yesterday, Rappler said the donation was done via a conference call. – Christina Mendez