The conversion by foreign fund Omidyar Network of its $1.5-million investment in online news provider Rappler into donation – deemed as a way of addressing the brouhaha over foreign control – must be coursed through an appropriate filing at the Court of Appeals instead of being aired over the media, the Securities and Exchange Commission (SEC) said on Thursday.
“Considering that the Commission’s decision against Rappler is currently pending appeal before the Court of Appeals, any action on this supervening event must be coursed through the Honorable Court through an appropriate pleading or manifestation,” the SEC said in a statement posted on its website.
“To date, we are unaware of any such pleading or manifestation officially conveying this information to the Court of Appeals and for what specific relief.”
Claiming violation of the Constitutional mandate for full Filipino ownership and control of mass media as well as other pertinent laws, the SEC issued an order dated Jan. 11, 2018 revoking the incorporation of Rappler Inc., citing this as the “mass media entity that sold control to foreigners.” Likewise stripped of its certificate of registration was Rappler’s 98.77-percent stockholder, Rappler Holdings Corp., which the SEC said was “existing for no other purpose than to effect deceptive scheme to circumvent the Constitution.”
In the same ruling, the SEC declared as “void” the Philippine depositary receipts (PDRs) issued by Rappler Holdings to Omidyar Network Fund LLC, a fund created by eBay founder Pierre Omidyar, claiming such as a “fraudulent” transaction under the Securities Regulation Code (SRC).
Omidyar Network announced on Wednesday that it has donated these controversial PDRs to 14 Filipino managers of Rappler, saying that this act would “eliminate what has been the artificial barrier and distraction created by the SEC in revoking license of Rappler.” Omidyar partner Stephen King had said: “This donation completely eliminated the sole basis of the SEC ruling” against Rappler Inc. and Rappler Holdings.
“In view of the foregoing, the Commission would like to remind all the relevant parties to abide by the sub judice rule and refrain from making unnecessary pronouncements through the media when recourse to judicial processes is readily available,” the SEC said.
In the meantime, the SEC reiterated an earlier statement from SEC chair Teresita Herbosa that it would internally study this development.
The SEC said it would look at this new event “to determine its next action before the Court of Appeals and to ensure the fulfillment of its duty of enforcing the Constitutional restrictions on nationalized activities such as mass media.”
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