Friday, March 29, 2024

Rappler refutes SEC assertion that registration revocation is final  

Online news website Rappler said it will appeal the order of the Securities and Exchange Commission (SEC) affirming the revocation of its registration because of violation on foreign ownership in mass media.

In an order dated June 28, 2022, the SEC sustained its earlier decision to revoke the certificates of incorporation of Rappler Inc. and Rappler Holdings Corporation. The agency also said the order is now executory as it has already attained finality.

But in an online press briefing, Rappler’s legal counsel Francis Lim stressed the SEC’s order can still be appealed to the Court of Appeals – or to the Supreme Court eventually – via a mode of appeal called Petition for Review.   

Lim said the SEC may have been confused with the previous order of the CA remanding the case to it for the final determination of the effect of donation of PDRs (Philippine Depositary Receipts) by Omidyar Network to Rappler’s Filipino managers.

This is different from the actual decision of the SEC revoking Rappler’s registration papers, which is still appealable to the higher courts, Lim pointed out.

Lim, a senior partner at high-powered law firm ACCRA Law, said the SEC, as a mere administrative body, cannot enforce its order to shut down Rappler without an actual court order resolving a case or appeal.

“We are entitled to appeal this decision and will do so, especially since the proceedings were highly irregular,” said Lim, a former president of the Philippine Stock Exchange, adding that PDRs are not similar to shares of stock that are prohibited to be owned by foreign entities in local media companies.

Meanwhile, the SEC said its latest decision is only an affirmation of its ruling issued on January 11, 2018, finding Rappler liable for violating the constitutional and statutory foreign equity restrictions when it issued the PDRs to Omidyar Network.

The SEC ruled that the provision in the PDRs requiring the Filipino stockholders of Rappler to seek the approval of Omidyar Network on fundamental corporate matters was “a violation of the absolute constitutional and statutory prohibition on foreign control of mass media.”

This decision of the commission was appealed by Rappler before the CA. While the appeal was pending, Omidyar Network, through its representative Stephen King, announced its intention to donate the PDRs to the Filipino staff of Rappler.

In a decision dated July 26, 2018, the CA upheld the finding of the SEC but directed the agency to conduct an evaluation of the legal effect of the alleged supervening donation by Omidyar Network of the PDRs and accordingly remanded the case to the commission.

The SEC then formed a special panel, which concluded that the donation of the PDRs neither created nor transferred any right in favor of the donees which would mitigate or cure the violation already committed.

The SEC said the CA affirmed and reiterated its 2018 decision in a resolution dated February 21, 2019. The SC then issued on September 25, 2019 a resolution declaring the case closed and terminated.

“The contentions raised by Rappler and Rappler Holdings Corp. have been squarely and adequately addressed by the SEC and the CA in their respective decisions, resolutions and orders, including the latest issuance from the Commission. In this light, the latest order issued by the Commission En Banc merely puts in effect its earlier decision and those of the Court of Appeals,” the agency said.

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