MANILA, Philippines – Rappler slammed the Department of Justice (DOJ) for ordering the National Bureau of Investigation (NBI) to investigate it for allegedly violating foreign equity rules.

Justice Secretary Vitaliano Aguirre II authorized the NBI on Wednesday, January 17, conduct a case buildup against Rappler because of a questionable clause in the Philippine Depositary Receipts (PDR) issued to its investor, Omidyar Network.

“This is a fishing expedition, and pure and simple harassment. We thought this was supposed to be in relation to PDRs and the alleged violation of the Constitution,” Rappler said in a statement.

“It’s all the more clear and blatant what government’s agenda is: they’re deadset to get Rappler and kill press freedom,” the social news network added.

A PDR is a financial instrument that allows foreigners to invest in a Filipino company, without owning any part of it.

This is consistent with the 1987 Constitution, which states that mass media in the Philippines should be wholly owned by Filipinos.

The SEC argued that a provision in the Omidyar PDR – which states that Rappler Holdings needs to seek the approval of two-thirds of PDR holders on corporate matters – violates the Philippine Constitution.

These corporate matters involve altering, modifying, or otherwise changing “the Company Articles of Incorporation or By-Laws” or taking “any other action where such alteration, modification, change, or action will prejudice the rights in relation to the ON PDRs.”

This was why SEC decided to revoke Rappler’s license to operate.

Rappler lawyer Francis Lim, however, said the penalty imposed by SEC was “too severe.”

Foreign correspondents earlier called the SEC decision an “assault against democracy”that is “tantamount to killing the online news site,” while business journalists said it is “a small step to a bigger, darker agenda.” – Rappler.com