‘THREAT TO PRESS FREEDOM’ | SEC revokes Rappler’s registration

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Securities and Exchange Commission Chairperson Teresita J. Herbosa. BUSINESSWORLD FILE PHOTO

MANILA, PHILIPPINES — (UPDATE4, 6:30 PM) The Securities and Exchange Commission (SEC) has revoked the registration of news organization Rappler, allegedly for violating the Constitution and the Anti-Dummy Law, CNN Philippines reported Monday. The SEC decision was slammed by a media organization but praised by government lawyers.

Rappler’s two top executives stressed that they are not closing down, and that the SEC’s decisions have no effect on their operations.

Rappler’s top breaking story confirmed the SEC order, and said it was accused by the SEC of “violating constitutional restrictions on ownership and control of mass media entities because of funds coming from Omidyar Network, a fund created by eBay founder and entrepreneur Pierre Omidyar.”

The decision dated January 11 but published on the SEC website on Monday (Jan. 15) said: “The En Banc finds Rappler, Inc. and Rappler Holdings Corporation, a Mass Media Entity and its alter ego, liable for violating the constitutional and statutory Foreign Equity Restriction in Mass Media, enforceable through laws and rules within the mandate of the commission.”

SEC voided the Omidyar Philippine Depositary Receipt (PDR) and revoked Rappler’s Certificate of Incorporation, according to the Rappler report.

Rappler said the SEC move was a “blow to press freedom” in the Philippines, and sought public support for itself. “The government has long targeted Rappler. The SEC investigation was ordered by the Office of the Solicitor General, which wrote the agency on December 14, 2016, to investigate Rappler over its PDRs,” said Rappler in its story.

Rappler noted that it had been on the receiving end of criticism from pro-administration groups, especially bloggers.

The SEC created a “Special Panel” on July 8, 2017, to conduct “formal, in-depth examination of Rappler Inc and its parent, Rappler Holdings Corporation, as to possible violations of nationality restrictions on ownership and/or control of Mass Media entities,” according to Rappler’s report.

NUJP WEIGHS IN

The National Union of Journalists of the Philippines said it is “outraged” at the action, deploring the regulator’s rejection of Rappler’s contention “that its foreign investors merely placed money in the outfit but do not own it.” NUJP recalled that Rappler had given this explanation “after President Rodrigo Duerte, in his state of the nation address last year, threatened to have its ownership investigated.”

The NUJP National Directorate said in a statement that that SONA line “was but one of many threats Duterte has made against media critical of him and his governance, such as the Philippine Daily Inquirer and broadcast network ABS-CBN, whose franchise renewal he threatened to block.”

NUJP expressed confidence, though, that Rappler is “capable of mounting a legal defense against what amounts to their closure,” and declared “full support to Rappler and all other independent media outfits that the state has threatened and may threaten to shut down.”

WE WILL REMAIN IN BUSINESS – RAPPLER

In a press conference later Monday, Rappler CEO Maria Ressa and acting managing editor Chay Hofileña stressed that they are not closing down, and that the SEC’s decisions have no effect on their operations.

Ressa said they will challenge the decisions, and are ready to go as far as the Supreme Court, if warranted.

As for whether the voiding of Omidyar’s PDR will affect Rappler’s finances, Hofileña said, “Not really,” given that it only counted for 5.5 percent of the total PDRs that went into Rappler.

Ressa added that when they submitted the PDRs in 2015, they were accepted by the SEC. Now, however, these were no longer acceptable, fueling her belief that the SEC’s decisions were politically motivated.

She also explained that they wanted to be “fiercely independent” as a news organization, which was why they sought funding from outside of the country. They did not want to be influenced by companies inside the Philippines.

Hofileña clarified that PDRs are not equivalent to ownership. Rather, she said, these are financial instruments that even the likes of ABS-CBN, GMA and PLDT use.

“It’s a template already that we really follow. There’s no violation there,” she said.

Those with PDRs have no say in the news organization’s day-to-day operations. They cannot tell Rappler to run a story or not to run a story. It is when one is a shareholder investor that one has a say in the way they work, Hofileña said.

Ressa likened Omidyar to a person who bets on a horse race: he or she can put their money on the horse, but this doesn’t mean he or she can tell the horse what to eat, or who its jockey will be. If the horse wins, the person gets money. If it doesn’t, he or she gets nothing.

“If we become profitable, they collect,” Hofileña added.

Ressa appealed to the government to understand that they exist “to help make our country stronger,” but was nevertheless thankful for the “strong support” they had already received from others, including invitations for them to put up a newspaper.

“We have faith,” she added.

CALIDA, ROQUE HAIL SEC DECISION

Solicitor General Jose Calida hailed the SEC action, however. He said “this decision demonstrates that even influential media outfits cannot skirt the restrictions set forth in the Constitution.”

Rappler, Calida said, “is free to seek redress before our courts,” and the OSG “is ready to defend the sound decision of the SEC in any forum.”

Presidential spokesperson Harry Roque said in an interview with CNN Philippines he is certain Calida can defend this “sound decision” by the SEC, which he praised for its defense of the Constitution.

Roque earlier also issued a statement on the matter, saying the SEC “is empowered to determine the legality of corporations.”

“We respect the SEC decision that Rappler contravenes the strict requirements of the law that the ownership and the management of mass media entities must be wholly-owned by Filipinos,” he further said. “Rappler may wish to exhaust all available legal remedies until the decision becomes final.”

SOLIDARITY NEEDED VS THREATS – KIKO

Sen. Francis “Kiko” Pangilinan, a key member of the Senate Minority and Liberal Party president, said the SEC action on Rappler is only the latest of a series of chilling developments that further restrict the democratic space.

“This, and other recent developments, have only made it more evident how important it is for people to have a way to come together. In a time of fear, of relentless attacks on our institutions, the abuse of power, and the feeling of helplessness that this breeds — we seek solidarity.”

Rights organization Karapatan also issued a statement, saying the revocation of Rappler’s SEC registration, “after months of articles about the Duterte regime’s anti-people drug war campaign, is clearly a move to constrict press freedom, targeting media platforms exposing the brutality and inhumanity of the government program.”

“This also attests to the reality that this regime is gradually moving towards a dictatorship,” said Karapatan secretary general Cristina Palabay. – With a report by Tricia Aquino, InterAksyon