CA Denies Rappler Petition to Review SEC Decision, but Orders Re-evaluation of Case

CMFR File Photo.

CMFR/PHILIPPINES — The Court of Appeals (CA) denied on July 26 online news site Rappler’s petition to review the revocation of its Certificate of Incorporation by the Securities  and Exchange Commission (SEC).

But the Court told the SEC  to give Rappler a “reasonable” time in which to comply with legal requirements.

It also said that while part of  its operating funds are from a foreign source,  which is “tantamount to some amount” of foreign control over the news organization, the funder “never exercised” the right to vote which it shared with Rappler’s holding company.

On January 11, SEC revoked the incorporation papers of the online  news site for allegedly violating the Constitution and the Anti-Dummy Law. The SEC order said that Rappler is in violation of  Article XVI, Section 11 of the Constitution, which limits the ownership and control of Philippine mass media to Filipino citizens.

According to the SEC resolution, part of Rappler’s funds are from Omidyar Network, a fund created by eBay founder and entrepreneur Pierre Omidyar as reflected in the Philippine Depositary Receipt (PDR) submitted by Rappler to SEC in 2015. (See, “SEC Revokes Rappler’s Incorporation Paper Months after Duterte’s Threat of Investigation”)

Rappler filed a 68-page petition for review before the CA on January 29. The petition argued that the agreement between Omidyar and Rappler does not constitute foreign control.  Rappler also claimed it was denied due process as mandated by SEC rules on the standard procedures for administrative action.

In its 72-page decision, the Court of Appeals denied the petition but directed the SEC, “…to conduct an evaluation of the legal effect of the alleged supervening donation made by Omidyar Network of all its Philippine Depository Receipts to the Staff of Rappler, Inc.” The case was returned to the SEC.

The same document noted that “The SEC, in the past, had pursued a policy that the revocation of certificate of registration should be the last resort.”

Aside from the revocation of its incorporation papers, Rappler is also facing a cyber libel  complaint filed by a businessman and allegations of tax evasion from the Bureau of Internal Revenue (BIR).

The Rappler case has raised concerns among media groups that the Duterte regime is  targeting critical media organizations for suppression.