ONLINE news site Rappler is not yet off the hook even after foreign investor Omidyar Network donated its $1.5-million investment to the media company’s 14 Filipino managers.
“Omidyar Network’s reported donation of its Philippine Depositary Receipts (PDRs) to its Filipino managers does not remove the fact that Rappler breached the Constitution,” Palace spokesman Harry Roque said in a statement.
“This latest act is nothing but a circumvention of the law, which restricts ownership of media entities in the country to 100 percent Filipino-owned,” he said.
Roque maintained that the decision of the Securities and Exchange Commission (SEC) to revoke Rappler’s license to operate was not an attack on press freedom.
“Rappler’s defense of infringement of press freedom is merely a ploy to distract from the real issue, as resolved by the Securities and Exchange Commission (SEC) that the former is a foreign entity,” he said.
“Let us therefore wait for the SEC, having jurisdiction, to address this development,” the Palace official added.
The SEC issued the ruling because of a provision in the PDR agreement between Rappler and Omidyar, ceding control to a foreign company.
A PDR is a financial instrument companies resort to in order to secure foreign investments.
In a statement on Wednesday, Stephen King, Omidyar’s head of Global Governance and Citizen Engagement, announced that it was donating its investment to Rappler’s Filipino managers, in a move to resolve foreign ownership issues.
“This completely eliminates the basis of the unwarranted SEC (Securities and Exchange Commission) ruling,” King said.
“We…strongly believe that the company should be allowed to continue operating unhindered in the Philippines,” he added.
Omidyar Network, owned by eBay founder Pierre Omidyar, however clarified it was not “cutting ties” with Rappler.
The move, it said, would remove the “barriers put in place” by the government when the SEC revoked the licenses of Rappler Inc. and Rappler Holdings Corporation in January for violating foreign ownership restrictions.
On January 29, Rappler filed a petition before the Court of Appeals, questioning the revocation of its certificates of incorporation. It said contrary to the decision of the SEC, the agreement between Rappler and Omidyar did not constitute “control.”
Rappler had decried the decision as “pure and simple harassment,” and an attack on press freedom. It said the ruling was “first of its kind in history — both for the Commission and for Philippine media.” CATHERINE S. VALENTE