SEC chair to critics: Prove politics behind decision to revoke Rappler's license

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Securities and Exchange Commission chair Teresita Herbosa said the agency decided on Rappler's license without fear or favor. (FILE PHOTO)

Metro Manila (CNN Philippines, January 19) — Securities and Exchange Commission (SEC) chair Teresita Herbosa challenged critics to prove that the body's decision to cancel Rappler's business registration was politically motivated.

Speaking publicly for the first time since the decision was issued, Herbosa said late on Thursday: "If they have proof that's the case then they have to present it. It's so unfair to us. Because without fear or favor, we just come out with whatever the law requires us to do."

Herbosa also hinted Rappler could only be pointing the finger at the SEC to cover up the fact it had violated foreign ownership restrictions in the Constitution.

"Whoever didn't get what they wanted from us, maybe they wanted us to say the PDRs were legal, then maybe they have their own agenda," Herbosa said on Thursday. "They have to resort to things like that in order to divert people's attention to what is the real issue."

READ: SEC cancels Rappler's license to do business

The SEC revoked Rappler's business registration in a Jan. 11 decision, saying the news outlet had engaged in fraud and circumvented foreign ownership rules by accepting over $1 million (around P50 million) from a foreign investor, Omidyar Network, in PDRs.

A PDR is a financial instrument that foreign entities can buy into for financial returns in a local company, though not in the form of dividends.

Rappler maintains that the PDRs do not grant Omidyar Network - an offshore fund set up by eBay founder Pierre Omidyar - any control over the company. It also alleged the Palace had a hand in the SEC ruling, with Rappler being highly critical of the Duterte administration.

Herbosa said that PDRs of media giants ABS-CBN and GMA had been approved by the agency before these were offered to the public. However, the case was different with online news agency Rappler.

READ: Rappler sees Malacañang hand in license revocation

President Rodrigo Duterte on Tuesday denied involvement in the SEC decision, insisting that Rappler had foreign owners.

READ: Duterte: I had nothing to do with SEC's ruling on Rappler

According to Herbosa, what actually triggered the SEC's investigation was Rappler's own public statements about its ownership.

This caught the eye of the Office of the Solicitor General, which then referred the issue to the SEC for review.

Nevertheless, Herbosa said the SEC did not make its Rappler ruling immediately executory.

Rappler will have until January 27 to appeal the decision. Should it appeal, it will still be allowed to operate unless the courts dismiss the petition and uphold the SEC's ruling.

READ: SEC won't go after other media firms with depositary receipts