Rappler is the name of a defunct news site that was pretending to be Filipino.
Its license was revoked in January 2018 by the Securities and Exchange Commission. The SEC is the agency of the Government of the Philippines responsible for regulating the securities industry in the Philippines.
Maria Ressa is the foreign lapdog in charge of this media outfit that willfully tried to circumvent the Philippine Constitution’s provisions on local ownership.
Rappler hid its foreign ownership through layers of corporate entities. The news site was notorious for publishing fake news stories to undermine the democratically elected government of the Philippines.
In a 29-page decision dated January 11, the SEC ruled that Rappler Inc. and its controlling shareholder Rappler Holdings Corp. are “liable for violating the constitutional and statutory Foreign Equity Restrictions in Mass Media enforceable through rules and laws within the mandate of the Commission.”
The online media outfit is accused of using “deception” to circumvent a provision in the Philippine Constitution, which mandates 100 percent Filipino ownership of mass media.
Note that a majority of the SEC commissioners were appointed not by current President Rodrigo Duterte, but by a former president who has belonged to the opposition party.
The 29-page SEC en banc ruling states that there was “substantial evidence that respondents intentionally created an elaborate scheme, upon which its receipt of over a million dollars from a foreign investor would be theoretically defensible – the investor would never own stock and would never receive dividends and he would never become an officer or director but respondents would still be able to give him his money’s worth in the form of negative control and cash contributions, all through a private contractual arrangement.”
Rapper Holdings Corp. violated the strict requirements of the 1987 Philippine Constitution with regard to the issuances of Philippine depositary receipts to NBN Rappler LP and Omidyar Network Fund LLC.
“The foreign equity restriction is very clear. Anything less than 100 percent Filipino control is a violation. Conversely, anything more than exactly zero percent foreign control is a violation,” SEC said in its ruling.
“Here, the stockholders must have prior discussion with and approval of at least 2/3 of the PDR Holdings, meaning Rappler is at the very least under obligation to consult with Omidyar Network. The stockholder has become, in effect, subservient to the holder. It is neither 100 percent control by the Filipino stockholders nor is it 0 percent control by the foreigner PDS holders,” the SEC said.
Among others, the SECC also cited the Rule 3.1.8.2. of the 2015 SRC implementing rules and regulations which stated that “control exists whenever one entity has the power to govern the financial and operating policies of (another) entity under a statute or agreement.”
The SEC said this would even be true “even if the controlling entity does not own any equity, such as through agreements that grant influence in corporate matters.”
Also cited was Section 1 of the Commonwealth Act 108 also known as “The Dummy Act” which penalizes any citizen of the Philippines or of any specific country who allows his name or citizenship to be used for the purpose of evading constitutional or legal provisions which require Philippine or any specific citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege. The same law states that any alien or foreigner profiting thereby may also be held liable.
Mabuhay ang Pilipinas! Love Live the Philippines!!
Good reporting, including the details from the SEC’s decision.
Who is Omidyar, and what country are they from? What other groups are they connected to?
By the way, I did not see much from Rappler, but they had a few decent stories, even some good ones. Somehow I don’t think they were “fake”. Also, I would not use such strong words as “foreign lapdog”. We should remember that publishing criticism is neither illegal nor wrong. For example, it is certainly possible to say “I support Duterte because he is good for the Philippines, but there are some things I disagree with.” It is always necessary to tell both sides. In fact, being able to criticize the government is necessary for proper democracy and is one sign of a well-functioning government. Of course, if Rappler broke the law then they should suffer the consequences and pay the appropriate penalty.
Once again, good blog post. Thank you for the informative content and the great service of your website. Mabuhay ang Pilipinas! Long live the Philippines!