MANILA, Philippines (Updated 12:05 p.m.) — The Court of Appeals (CA) denied the petition of online news site Rappler to reverse the ruling of the Securities and Exchange Commission (SEC) to revoke its business registration.
In January, the SEC revoked the license of Rappler for allegedly violating the constitutional and statutory Foreign Qeuity Restriction in Mass Media.
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In its 72-page ruling issued Thursday, the apellate court noted that the issuance of Philippine Depositary Receipts (PDR), a financial instrument allowing foreigners to invest in a Filipino company without owning any part of it, is not illegal.
The court acknowledged the earlier statement of Rappler that other Filipino corporations such as ABS-CBN, GMA and Globe have issued PDRs in the past and were allowed by the SEC.
The court indicated that one of the grounds for the rejection was: "That the purpose of the corporation are patently unconstitutional, illegal, immoral, or contrary to government rules and regulations."
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The apellate court also found that the treasurer's affidavit on the amlount of capital stock subscribed and paid was false.
"That the percentage of ownership of the capital stock to be owned by citizens of the Philippines has not been complied with as required by existing laws of the Constitution," the ruling read.
The CA also ordered the SEC to evaluate the legal effect of the alleged donation of Omidyar Network of all its PDRs to Rappler staff.
"Accordingly, this case is hereby remanded to the Securities and Exchange Commission for this purpose," the court said.
In its ruling, the apellate court noted that the reply of Rappler stating that Omidyar has donated all its PDR to the news site's staff was a new development not presented to the SEC.
Meanwhile, Rappler has not yet received a copy of the decision, according to its legal counsel Francis Lim.
"We have not yet received a copy of the decision but we will surely not take the decision sitting down and will take all legal actions necessary to have the issue finally resolved by the Supreme Court," Lim said, as reported by Rappler.
The order of the CA to the SEC to conduct further evaluation on the legal implications of the donation of PDRs to Rappler staff means that it would be "business as usual" for the online news site.
"What this means is that the SEC decision cannot be enforced or implemented until the issue is finally decided," the Rappler counsel said.
United Nations human rights experts had raised alarm over the SEC's move to revoke Rappler's license.
UN special rapporteurs said that the move "comes at a time of rising rhetoric against independent voices" in the Philippines.
“We urge the government to return to its path of protection and promotion of independent media, especially those covering issues in the public interest," UN special rapporteurs said in a joint statement in January. — Patricia Lourdes Viray