Revoked Corporate Franchises of Rappler Affirmed by SEC

The Securities and Exchange Commission (SEC) has affirmed the decision to revoke the incorporation certificates of Rappler, Inc. and Rappler Holdings Corporation (RHC) for violating the statutory and constitutional restrictions on foreign ownership of mass media. 

The SEC has released a statement saying “The contentions raised by Rappler and RHC have been squarely and adequately addressed by the SEC and the CA (Court of Appeals) in their respective decisions, resolutions, and orders, including the latest issuance from the Commission.”

“In this light, the latest order issued by the Commission En Banc merely puts in effect its earlier decision and those of the Court of Appeals,” the statement adds. 

The SEC recalled that in a decision last January 11, 2018, the Commission En Banc, found Rappler liable for violating the statutory and constitutional foreign equity mass media restrictions when it issued Philippine Depositary Receipts (PDRs) that gave a foreign entity, namely, Omidyar Network, control over Rappler. 

The PDRs indicated a provision that requires Rappler’s Filipino stockholders to gain approval of Omidyar Network on corporate proceedings which is deemed as a violation of the prohibition of foreign control over Philippine media. 

The PDRs issued by Rappler were declared by the SEC as void pursuant to Republic Act No. 8799 Section 71.2 of the Securities Regulation Code for being a fraudulent transaction under Section 26.1 of the Philippine law. 

“It is in this light that the SEC issued the order dated June 28, 2022, affirming the revocation of the certificates of incorporation of Rappler and RHC,” says the SEC.

The CA’s decision is noted to be final and means that the most recent resolution supports the Commission’s stance that Rappler and RHC violated the law and that their certifications should be revoked.

Source: Manila Bulletin