Lawyer: SEC says Omidyar PDR donation to Rappler staff has no legal effect in case
MANILA, Philippines — The Securities and Exchange Commission has told the court handling the appeal on the revocation of Rappler’s certificates of incorporation that Omidyar’s donation of the contested Philippine Depositary Receipts to staff has no legal effect, a lawyer for the media company said.
This means that the donation, which was meant to address questions on whether PDRs impart ownership, will not affect the SEC's decision on Rappler's business registration.
In a virtual press conference on Monday, lawyer Francis Lim told reporters that 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."
Lim said they already filed a motion for reconsideration with the SEC panel.
The case stemmed from SEC’s order to cancel the certificate of incorporation of the online news site and Omidyar’s PDR — a financial instrument that gives foreign investors passive economic interest in a Philippine company — in January 2018. The regulatory body held that the company allegedly violated the constitutional and statutory Foreign Equity Restriction in Mass Media.
This was the first case filed against Rappler, which has faced a raft of cases since then, and they have appealed the SEC ruling to the CA. The appeals court however rejected the media company’s plea to reverse the SEC ruling and instead asked the regulatory commission to evaluate the legal effect of the alleged donation of Omidyar Network of all its PDRs to Rappler staff.
But the SEC had not sought Rappler’s comment before it submitted a report to the CA, Lim said Monday.
"We felt, pursuant to many decisions of the Supreme Court, [the] subsequent transfer of the disputed shares to qualified Filipinos, qualified transferees — in this case, Filipinos — would cure whatever the defects are," the lawyer added.
The CA would now weigh in on the SEC report.
But would this mean that the commission’s previous ruling to revoke Rappler’s certificates of incorporation is immediately executory?
It remains to be seen, Lim said. "It depends on how the [CA] views the SEC decision upholding the revocation, whether it’s already final and therefore cannot be revisited by the same division of the Court of Appeals."
"It’s good for us, it gives us the opportunity to debate or litigate the effect of donation of PDRs to Filipinos," the lawyer added.
Slew of cases vs Rappler
The SEC 2018 ruling turned out to be the first in a string of legal challenges to be filed against the media network and its CEO, Maria Ressa.
The high-profile journalist has since been subjected to ten arrest warrants, and seven—including five tax-related ones and a cyberlibel conviction under appeal—are still pending in Philippine courts.
Ressa’s international lawyers, Amal Clooney and Caoilfhionn Gallagher, appealed to the government to drop the cases.
Gallagher, an international human rights lawyer, said they have noticed that the government has been using “a much wider array of legal tools” against journalists. In Ressa’s case, six of the pending cases are related to finance and one is cyber libel.
But of all these cases, one thing is common. She claimed that it stemmed from “a wish of the powerful, from the authorities to silence Maria, to stop her from doing her job.”
Clooney, a lawyer who specializes in international law and human rights, meanwhile shared that the international community has been monitoring the case of Ressa.
She said the case may also affect the Philippines’ relations with other countries.
In the Philippines, she said she has reached out to the Department of Justice but she has far failed to secure a virtual meeting with Secretary Menardo Guevarra. The justice chief told reporters this was mostly due to scheduling conflicts.
Ressa is currently in the US to attend a series of lectures at Harvard University and visit her parents.
She will again be seeking courts to allow her to attend the awarding of the Nobel Peace Prize, which she and fellow journalist from Russia, Dmitry Muratov, won.
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