MANILA — Justice Secretary Vitaliano Aguirre II ordered the review of the Securities and Exchange Commission (SEC) decision revoking the certificate of incorporation of online news website Rappler for violating foreign ownership restrictions on mass media.
“I have directed my legal staff to study the legal issues of this case,” Aguirre told reporters when sought for a comment.
Aguirre said the DOJ probe would cover possible criminal liabilities of executives of the online media entity.
Asked if the probe would include criminal aspects, Aguirre answered “yes, it will cover all angles.”
In a decision issued Monday, the SEC cancelled the registration of Rappler, Inc., the mass media entity that “sold control” to foreigners, and Rappler Holdings Corporation being its alter ego, “existing for no other purpose than to effect a deceptive scheme to circumvent the Constitution.”
It cited foreign equity restriction in the Constitution, Presidential Decree and the Securities Regulation Code that provide that “the ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations or associations wholly owned and managed by such citizens.”
The SEC En Banc also declared Omidyar Philippine Depository Receipts (PDR) void for “being a fraudulent transaction within the ambit of Section 26.1 of the Securities Regulation Code.”
In October 2015, Rappler Holdings Corp. issued 7,217,257 PDRs covering shares of Rappler Inc. designated as ON PDRs because they were sold to Omidyar Network Fund LLC, a foreign juridical entity.
Rappler Holdings publicly reported that it received an investment from Omidyar Network LLC.
It also issued PDRs covering shares of Rappler Inc. to NBM Rappler L.P., a foreign juridical entity. NBM Rappler L.P. was founded and co-owned by North Base Media Ltd., a foreign juridical entity.
The body conducted its investigation upon the request of the Office of the Solicitor General (OSG) in December 2016.
In a statement, Solicitor General Jose Calida lauded the SEC’s move, stating that this shows “even influential media outfits cannot skirt the restrictions set forth in the Constitution”.
“I applaud the SEC for revoking Rappler’s certificate of incorporation. This decision demonstrates that even influential media outfits cannot skirt the restrictions set forth in the Constitution,” Calida said.
He said Rappler was free to seek legal remedy, saying that his office is ready to defend the SEC ruling in any forum.
On Monday, Malacanang said it respects the decision of the SEC to revoke the certificate of incorporation of Rappler.
“We respect the SEC decision that Rappler contravenes the strict requirements of the law, that the ownership and the management of mass media entities be wholly-owned by Filipinos,” Presidential Spokesperson Harry Roque said in a press statement.
Roque said the SEC was empowered to determine the legality of corporations in the country.
“Rappler may wish to exhaust all available legal remedies until the decision becomes final,” he said. (PNA)
