SEC 'internally studying' Omidyar's $1.5-M PDR donation to Rappler

MANILA, Philippines – The Securities and Exchange Commission (SEC) is "internally studying" the implications of Omidyar Network Fund LLC's decision to donate its $1.5-million worth of Philippine Depositary Receipts (PDRs) to the managers of Rappler Incorporated and its parent firm.

Once done, the SEC said it will determine its next action before the Court of Appeals which is reviewing its decision to revoke the registration of Rappler and Rappler Holdings Corporation.

"To date, we are unaware of any such pleading or manifestation officially conveying this information to the Court of Appeals and for what specific relief...In the meantime, SEC is internally studying this development," SEC said in a statement on Thursday, March 1.

A day before, Omidyar Network partner Stephen King said in a conference call that the donation "completely eliminates the sole basis of the SEC ruling against Rappler Incorporated and Rappler Holdings Corporation."

Rappler lawyer Francis Lim said his camp has "not yet" filed a pleading or manifestation on the development before the Court of Appeals.

Considering that the SEC's decision against Rappler is pending before the Court of Appeals, the Commission said any action on this supervening event must be coursed through the honorable court through an appropriate pleading or manifestation.

But SEC chairwoman Teresita Herbosa on Wednesday told Rappler that the SEC's decision to declare null and void the Omidyar Network PDRs as well as revoke Rappler's incorporation papers for allegedly violating constitutional restrictions on ownership "has not changed insofar the commission is concerned."

Back in January, the SEC published a decision, saying a provision in the PDRs issued to Omidyar Network "is a violation of Foreign Equity Restriction of the Philippine Constitution."

A PDR is a financial instrument that corporations resort to, to secure foreign investments without violating the nationality restrictions prescribed by the Constitution.

The alleged violation on the Philippine Constitution, however, was repeatedly denied by Rappler. Also in January, the media firm filed a petition for review, questioning the revocation of their certificates of incorporation before the Court of Appeals. The case awaits decision.

Abide by sub judice rule

The SEC also reminded all relevant parties to "abide by the sub judice rule and refrain from making unnecessary pronouncements through the media when recourse to judicial processes is readily available."

The SEC added it will "ensure the fulfillment of its duty of enforcing the constitutional restrictions on nationalized activities such as mass media."

Presidential Spokesperson Harry Roque, also on Thursday, claimed Omidyar Network's donation proves Rappler violated the constitutional provisions on foreign ownership of media companies. (READ: Rappler says Omidyar donation not admission of guilt)

In response to Roque's statement, Rappler lawyer Lim said: "Let the courts decide that issue." – Rappler.com