MANILA, Philippines – Securities and Exchange Commission (SEC) said Rappler Incorporated is still free to continue its operation while its decision to revoke the media firm's license for allegedly violating a constitutional rule is not yet "final and executory."
"Rappler can exhaust legal remedies. [They can] appeal to the Court of Appeals within 15 days. Meanwhile, SEC decision is not final and executory," SEC Spokesperson Armand Pan replied in a text message late Monday, January 15.
SEC last Thursday, January 11 decided to revoke the news organization's license, alleging that it violated the Foreign Equity Restriction of the Philippine Constitution.
The corporate regulator was pertaining to a provision in the Philippine Depositary Receipts (PDRs) issued to Omidyar Network Fund LLC, which was approved by the SEC in 2015.
SEC said it started an "internal" probe as early as December 2016 when it received a complaint from the Office of the Solicitor General, asking the regulator to investigate over "any possible contravention of the strict requirements of the 1987 Constitution."
'Without due process'
But Rappler chief executive officer Maria Ressa said the decision was made in "less than 5 months" since the media outlet received a show-cause order from SEC in August. (READ: Amnesty International slams 'alarming attempt' to silence Rappler)
"There was no due process. We got a show-cause from SEC in August, and in less than 5 months this ruling came out. The decision came out very quick," Ressa said in a press conference on Monday.
She added that "the en banc, essentially, issued an order to shut us down without giving us the opportunity to respond to what the special panel found."
Rappler sought for Pan's response on the news organization's call for due process, but he has not replied to the query yet.
He, however, said that SEC's decision to revoke the news organization's certificate of registration will only become final "if no appeal is taken within 15 days."
Pan said the violation to the Constitution was seen in a "repugnant" provision in the terms of the PDRs issued to Omidyar Network by Rappler's parent firm, Rappler Holdings Corporation, in November 2015.
SEC argued that an Omidyar Network PDR provision – which states Rappler Holdings need to seek approval of 2/3 of PDR holders on corporate matters – is a violation to Foreign Equity Restriction of the Philippine Constitution.
Foreign Equity Restriction states that "ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens."
Rappler, however, repeatedly clarified the issue, saying PDRs do not grant ownership. (READ: Debunking lies about Rappler)
"Only the Omidyar Network PDR contains repugnant provision, not the North Base Media PDR," Pan said.
Back in April 2015, Rappler Holdings also announced an investment by North Base Media, a fund for independent journalism founded by 3 prominent journalists: Marcus Brauchli, who headed the newsrooms of the Wall Street Journal and the Washington Post; Sasa Vucinic, founder and former head of the George Soros-backed Media Development Investment Fund; and Stuart Karle, former Reuters chief operating officer.
PDR is a security that grants the holder the right to the delivery of sale of the underlying shares, but not ownership.
Media and PDRs
Two publicly-traded media giants, ABS-CBN Corporation and GMA Network Incorporated, have also issued PDRs in the past to get foreign funding without violating the Constitution.
Asked how the Rappler decision will affect the two broadcast giants' status, Pan replied: "We cannot comment on ABS-CBN's and GMA's PDRs since they are not parties in this proceeding."
SEC chairperson Teresita Herbosa was also sought for comment, but she could not be reached as of press time.
Last June, President Rodrigo Duterte claimed in his State of the Nation Address that Rappler is "fully owned by Americans," an allegation that Rappler has repeatedly denied.
Solicitor General Jose Calida lauded SEC's decision, saying "demonstrates that even influential media outfits cannot skirt the restrictions set forth in the Constitution."
Meanwhile, the National Union of Journalists in the Philippines and the Foreign Correspondents Association of the Philippines have condemned SEC's decision against the news website. (READ: Journalist groups hit SEC decision vs Rappler)
Amid the legal battle, Ressa said Rappler will continue to operate as it files the necessary motions for reconsideration with the courts.
"We stand tall. We stand firm. It's good. This is a moment we say we stand for press freedom," she told reporters.
During the 2nd half of 2017, Rappler started a fundraising campaign, asking readers to help the organization "stay free and independent of political pressure and commercial interests."
In 4 months' time, Rappler has collected P1.175 million. – Rappler.com