Palace to Rappler on seeking CA relief: Good luck

MANILA, Philippines — Malacañang yesterday wished online news outfit Rappler good luck on its effort to seek the reversal of the decision of the Securities and Exchange Commission (SEC)’s order revoking its corporate registration for alleged violation of the constitutional ban on foreign ownership of media firms in the country. 

“Good luck to them. After all, the noise that they’ve created, they are certainly hoping that they could influence the Court of Appeals,” presidential spokesman Harry Roque said in a press briefing.

In a 70-page petition for review, Rappler Inc. and Rappler Holdings Corp. (RHC) asked the appellate court to void the decision issued by the SEC last Jan. 11.

The petitioners, through law firm Angara Abello Concepcion Regala & Cruz (ACCRA), argued that the SEC issued the assailed order hastily and that it violated their constitutional right to due process.

They alleged that the SEC came up with the revocation order in the absence of a formal charge, which was supposed to be required in the commission’s rules.

“There was also no formal administrative action filed against Rappler and RHC before the SEC. Without an administrative action, surely, no administrative action, including the suspension or revocation of the corporation’s franchise, could have been imposed by the SEC,” the petition read.

“Since no administrative charge was instituted against Rappler and RHC, they were not provided with sufficient notice of the formal charge against them (because none was issued) and the opportunity to be heard,” it stressed.

Rappler also argued that the SEC erred in canceling  Rappler’s certificate of incorporation and voiding the Omidyar Philippine Depository Receipts (PDRs).

“The Omidyar PDR does not confer upon Omidyar control, much less ownership and management, over Rappler. As such, the SEC has no basis to declare void the Omidyar PDR,” the petitioners claimed. 

“At most, Clause 12.2.2 of the Omidyar PDR is in the nature of a negative covenant put into place to protect the interest of Omidyar, as investor. This is why Omidyar’s approval is confined only to acts that may prejudice its rights under the Omidyar PDR,” they further explained.

The petitioners pointed out that the SEC has no finding that Omidyar had actually exercised control of the media outfit.

Rappler also argued that it cannot be covered by Presidential Decree No. 1018 or the implementing law of the ban on foreign ownership in media entities under Article XVI, Section 11 (1) of the 1987 Constitution simply because it “is not engaged in the business of mass media.”

It stressed that the “mass media” as contemplated in the deliberations of the constitutional commission covered only print and broadcast media and that the SEC erred in classifying it as part of this category based only on the outfit’s previous statement claiming it to be “mass media.”

Rappler said it has its own kind and is the country’s first “all-digital news organization.”

“All in all, Rappler is not engaged in the business of ‘mass media’ as contemplated by Article VI, Section 11 (1) of the Constitution and cannot be held accountable under it,” it claimed.

Also, the petitioners argued that it was established for “legitimate global business expansion” and “not to vest control over Rappler to Omidyar.”

“The required clear and convincing evidence to justify the piercing of the corporate veil is clearly absent in this case,” Rappler stressed.