SEC affirms order shutting down Rappler

MANILA, Philippines — The Securities and Exchange Commission (SEC) has affirmed the revocation of the certificates of incorporation of online news site Rappler and Rappler Holdings Corp. (RHC).

In an order dated June 28 and released yesterday, the SEC upheld its Jan. 11, 2018 decision shutting down Rappler for violating the constitutional and statutory foreign equity restrictions on mass media when it issued Philippine Depositary Receipts (PDRs) that granted Omidyar Network, a foreign entity, control over the media organization.

The SEC said Rappler has lost its “juridical personality and corporate powers.”

Rappler, however, can still file an appeal and continue to operate while the petition is pending.

Among its options, the media organization can also reorganize as a sole proprietorship or partnership instead of a corporation, sources in the legal profession said.

Not all businesses need to register as a corporation unless required by law, as in the case of lending and financing companies.

“We have existing legal remedies all the way up to the highest court of the land. It is business as usual for us since, in our view, this is not immediately executory without court approval,” Rappler said in a statement.

The PDRs included a provision requiring the Filipino stockholders of Rappler to seek the approval of Omidyar Network on fundamental corporate matters, which the SEC said is a violation of the absolute constitutional and statutory prohibition on foreign control of mass media.

The SEC revoked the certificates of incorporation of Rappler, being the mass media entity that sold control to foreigners, and of RHC, an alter ego that existed for no other purpose aside from effecting a scheme aimed at masking the former’s constitutional violation.

Rappler had earlier appealed the SEC’s decision before the Court of Appeals. In a decision dated July 26, 2018, the CA upheld the finding of the commission that Rappler sold control to foreigners.

On Sept. 25, 2019, the Supreme Court issued a resolution declaring the case closed.

The CA proceeded to issue another resolution dated Dec. 4, 2019 declaring that its 2018 decision has attained finality as of March 21, 2019.

Reacting to the SEC’s order, the National Union of Journalists of the Philippines said it stands with Rappler and its journalists and staff as the government moves to shut down the independent news site over issues with the SEC registration.

‘Retaliation’

Human Rights Watch (HRW) branded the SEC’s order shutting down Rappler’s operation as a retaliation of the government to the news site’s fearless reporting.

HRW Asia deputy director Phil Robertson said the SEC’s move is also an effort to silence Rappler co-founder and Nobel Peace Prize winner Maria Ressa “by hook or by crook.”

Robertson pointed out that Rappler has been fearless in its reporting about rights abuses in President Duterte’s war on drugs, the use of disinformation on social media by Duterte and president-elect Ferdinand Marcos Jr., as well as a wide variety of rights abusing actions over the past six years.

Senators hit shutdown order

Senators deplored the shutdown order of the SEC against Rappler and said the online news outfit must be allowed to seek all possible legal redress.

Sen. Aquilino Pimentel III said Rappler could obtain relief via a temporary restraining order (TRO) from a higher court.

“If they can get a TRO then the order can be stopped or held in abeyance. We should follow court processes and hierarchy,” Pimentel told reporters.

Sen. Risa Hontiveros found it deplorable that the administration continues to find “new ways of threatening legitimate news organizations not to exercise press freedom.”

“And while many registered news outfits are being crushed, unaccountable and insensitive vloggers and internet journalists have been given accreditation to cover important events in government. This only sows distrust and cultivates a tame coverage,” Hontiveros said.

Sen. Bong Revilla, who chairs the Senate committee on public information and mass media, however said the decision of the SEC should not be seen as a suppression of press freedom nor an attempt to abridge free speech, “but rather a valid legal decision of the government’s regulatory body to uphold the provision of the Constitution to protect the Filipino people.”

Press freedom

United States Vice President Kamala Harris’ husband Douglas Emhoff underscored yesterday the US commitment to freedom of speech and of the press following the SEC’s order against Rappler.

“I will leave the administration to respond to that. But I know, on behalf of the president, the vice president and the entire administration, it’s a deep commitment toward freedom of speech, freedom of expression, human rights. And that’s what we stand for and that’s what we believe in,” Emhoff told reporters.

Emhoff visited the Manila American Cemetery and Memorial in Taguig City. He is in Manila to lead the US delegation attending the inauguration of president-elect Ferdinand Marcos Jr. today.

Emhoff paid a courtesy call on vice president-elect Sara Duterte yesterday.

The US delegation includes US embassy Chargé d’Affaires Heather Variava, Filipino-American Congressman Bobby Scott of Virginia, Office of Management and Budget deputy director Nani Coloretti, former vice chairman of the Joint Chiefs of Staff Admiral Sandy Winnefeld, National Security Council senior director Edgard Kagan and US executive director to the ADB Chantale Wong.

Militant group Anakpawis slammed the government for its “Marcosian attack against critical mass media and blatant violation of press freedom.”

ACT Teachers party-list Rep. France Castro said the attacks on freedom of the press continue with barely a day left in the Duterte administration.

“We are now in digital martial law as the government continues to target the press and censor the information available to the public with the shutdown of ABS-CBN, the blocking of websites of progressive organizations and now with the SEC order to close Rappler,” Castro said.

She said the SEC decision is “another move of undemocratic forces who are targeting the media to have a free hand in spreading disinformation and fake news.” – Paolo Romero, Cecille Suerte Felipe, Sheila Crisostomo, Pia Lee-Brago