Philippine regulator revokes license of news website for ownership violations

Two foreign investors were bought into the company in 2015 through Philippine Depositary Receipts. (Courtesy Rappler)

MANILA: The Philippine corporate regulator has rescinded the operating license of a prominent online news platform, arguing it had used a “deceptive scheme” to violate the constitution’s restrictions on foreign ownership of domestic media.
The Securities and Exchange Commission (SEC) said in a statement news website Rappler (www.rappler.com) as a media entity had violated foreign equity restrictions because it “sold control to foreigners.”
Its holding company, Rappler Holdings Corporation, existed only to effect a “deceptive scheme to circumvent the constitution,” the SEC said in explaining a Jan. 11 ruling, which was made public on Monday.
SEC Secretary Armando Pan in a text message said the decision was “not final and executory” and Rappler could appeal within 15 days.
Rappler, established in July 2011, has had a rocky relationship with the administration of President Rodrigo Duterte, who has voiced in numerous speeches his annoyance at its reporting.
Rappler said in a statement the decision was “pure and simple harassment” and called it “the seeming coup de grace to the relentless and malicious attacks against us since 2016.”
“We intend to not only contest this through all legal processes available to us, but also to fight for our freedom to do journalism,” it said.
Duterte threatened during his State of the Nation Address last year to investigate Rappler’s ownership, accusing it of being fully American owned.
Rappler at the time responded saying that though it had foreign investors, they were not the owners, and Rappler “remains 100 percent Filipino owned.”
Two foreign investors were bought into the company in 2015 through Philippine Depositary Receipts. They were Omidyar Network, a fund created by eBay founder and entrepreneur Pierre Omidyar, and North Base Media, a fund for independent journalism founded by three prominent foreign journalists.
SEC Commissioner Antonieta Ibe said the decision was carefully reached and should not be seen as an attack on the media.
“There was continuous deliberation by the lawyers. It was really studied,” Ibe told Reuters.
Duterte’s spokesman Harry Roque said the president’s office respected the decision of the SEC, which is empowered to determine the legality of corporations.
According to the 1987 Philippine constitution, ownership and management of media “shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.”