SEC stands by decision to revoke Rappler's license

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Metro Manila (CNN Philippines, November 22) – The Securities and Exchange Commission upholds that foreign investor Omidyar Network's (Omidyar) donation of financial instruments to Rappler has "no effect" in overturning the body's 2018 decision to cancel the media outfit's license.

Francis Lim, lawyer of Rappler chief executive officer Maria Ressa, confirmed in a briefing on Monday the SEC submitted its latest report to the Court of Appeals (CA) without hearing their side.

"Unfortunately, the SEC submitted a report to the Court of Appeals saying it [donation] has no effect without giving us the opportunity to comment on the effect," said Lim. "We made a very strong case there, and unfortunately the SEC panel did not ask for our view before submitting its report to the Court of Appeals."

Rappler also filed a motion for reconsideration before the SEC on the body's decision dated Jan. 11, 2018, which revoked the media organization's license to do business for supposedly engaging in a fraudulent transaction and circumventing constitutional restrictions on foreign ownership.

RELATED: SEC cancels Rappler's license to do business 

The SEC found out that Rappler allowed Omidyar to hold Philippine Depositary Receipts, a financial instrument that foreign entities can buy into for financial returns in a local company but not in the form of dividends which are tied to ownership.

Rappler has said PDRs do not give ownership rights, and other large companies have a similar set-up. It also clarified the investment does not affect editorial operations.

The embattled media company elevated the issue to the CA, which affirmed that Rappler is not 100% Filipino-owned and upheld the SEC decision. 

The appellate court, however, remanded the ruling back to SEC in settling the over ₱78 million donation received by Rappler from Omidyar.

Lim also clarified the SEC order is not yet in effect as the CA needs to decide on whether or not to uphold the body's ruling given the latest report submitted.

"That itself is an issue, it depends on how the Court of Appeals views the SEC decision upholding the revocation, whether it's already final and therefore cannot be revisited by the same division of the Court of Appeals. It's good for us, it gives us the opportunity to debate or litigate the effect of donation of PDRs to Filipinos," said Lim.