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CA restores Rappler’s media license
By J.Lo
“Securities and Exchange Commission is ordered to restore Certificate of Incorporation of Rappler, Inc. and Rappler Holdings Corporation in its records and system and withdraw all its issuances and actions made pursuant to its illegal revocation of the same,” Court of Appeals Special 7th Division in 48-page decision promulgated on July 23.
Court of Appeals has ordered to restore certificate of incorporation of the company that runs news website Rappler and its owner, Rappler Holdings Corp., voiding 2022 ruling by Securities and Exchange Commission declared company was not 100% Filipino-owned.
In statement Rappler said appeals court’s decision was “vindication after tortuous eight years of harassment.”
“Rappler welcomes Court of Appeals,CA ruling eliminates long-standing threat to its corporate existence on account of flawed ruling by Securities and Exchange Commission ,SEC…when rule of law prevails, justice is served, CA was unequivocal in its rejection of SEC’s 2018 shutdown order, declaring it ‘illegal’ and ‘grave abuse of discretion ,” statement read.
In 2018, regulatory commission ordered to shut down Rappler for violating constitutional prohibitions for mass media when it issued Philippine Depositary Receipts (PDRs) gave Omidyar Network, foreign entity, control over media organization.
That same year, Court of Appeals upheld regulatory commision’s decision that media organization allegedly violated Constitution and foreign equity restrictions in mass media.
However, the court also asked regulatory commission to evaluate legal effect of alleged donation of Omidyar Network of all its PDRs to Rappler staff.
In 2022, SEC ruled that Omidyar’s donation of PDRs “did not cure violation by Rappler Inc. and Rappler Holdings Corporation” and upheld its revocation of Rappler’s certificates.
On July 23, appeals court ruled regulatory commission had committed grave abuse of discretion when it ruled donated PDRs did not waive Rappler’s alleged violation without actually studying terms and conditions of donation.
Decision noted regulatory commission did not conduct any hearing or receive any evidence from petitioners prior to making its ruling.
“Thus, it has no knowledge whatsoever terms of donation, nor has it even reviewed donation itself,” it stressed.
SEC “chose to ignore” appeals court’s order and “‘evaluated’ legal effect of Omidyar’s donation without even bothering to look at donation itself,” decision said.
“Worse, it actively avoided giving petitioners opportunity to present the same…such action is height of grave abuse of discretion,” it added.
SEC also “intentionally shirked its responsibility, ignoring directive of CA 12th Division to ‘evaluate terms and conditions of alleged supervening donation.'”
“On this basis alone, assailed Compliance and Order should be reversed and set aside,” decision said.
Appeals court also ruled PDRs by Omidyar did not amount to constitutional violation.
“As law and jurisprudence stand, there is nothing prohibiting Filipinos from entering into PDR agreements, even if underlying shares are mandated to be Filipino-owned, only limitation, pursuant to above-cited cases, is to issue shares of stock which are lacking in voting rights, right to dispose or right to receive dividends…here, Rappler Holdings retained all these rights,” decision read.
Facts point to Rappler being “currently wholly owned and managed by Filipinos, in compliance with Constitutional mandate,” decision said.
News site considers decision to be its “biggest case as company,” according to its report on the decision.
The 2018 ruling by regulatory commission turned out to be the first in slew of cases filed against Rappler, which one of several prominent news organizations that earned ire of Duterte administration from 2016 to 2022.
Former President Rodrigo Duterte routinely vilified media in public speeches during his six-year term. He once publicly blasted Rappler as “fake news outlet” for reporting on multibillion-peso Navy frigate acquisition project, ushered in closure of ABS-CBN, the nation’s largest broadcaster, and issued threats against the Philippine Daily Inquirer.
Rappler said it was “fact that Duterte government used SEC order to unleash its power to further harass us, our employees, our stakeholders, and our communities.”
“Banks refused to do business with us…clients shied away from advertising with us…government officials and agencies shut their doors on us…we were forced to close our Jakarta bureau, stop our expansion plans… Rappler couldn’t even open bank account outside the Philippines, we look forward to speedy dismissal of our remaining two cases: cyber libel case at Supreme Court and anti-dummy case at Pasig court ,” company said in its statement.
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