SEC affirms order to shut down Rappler

Metro Manila (CNN Philippines, June 29) — The Securities and Exchange Commission has upheld its earlier decision to shut down online news organization Rappler, its CEO Maria Ressa announced Wednesday.

The 2021 Nobel Peace Prize laureate made the announcement during her speech at the East-West Center international media conference in Hawaii.

"In an order dated June 28, our Securities and Exchange Commission affirmed its earlier decision to revoke the certificates of incorporation of Rappler Inc. and Rappler Holding Corporation," the organization's statement read. "We were notified by our lawyers of this ruling that effectively confirmed the shutdown of Rappler."

The SEC confirmed the issuance of its order a few hours after, reiterating Rappler's supposed "violation of constitutional and statutory restrictions on foreign ownership in mass media."

"The Company Registration and Monitoring Department is hereby directed to effect the revocation of the Certificates of Incorporation of Rappler, Inc. and Rappler Holdings Corp. in the records and system of the Commission," part of the 12-page order read, citing the Constitution and Presidential Decree 1018, which limits the ownership and management of mass media to Filipino citizens.

In 2018, the SEC ordered to cancel Rappler's certificate of incorporation, claiming that the news organization allowed foreign investor Omidyar Network — an investment company owned by eBay auction site founder Pierre Omidyar — to hold Philippine Depositary Receipts (PDRs), a financial instrument that foreign entities can buy for financial returns in a local company but not in the form of dividends which are tied to ownership.

Rappler had appealed the SEC ruling but the organization's legal counsel said in 2021 that the SEC submitted a report to the Court of Appeals (CA), saying that Omidyar's alleged donation has no legal effect in the case, without hearing the news organization's side.

Rappler also maintained that PDRs do not give foreign ownership rights and the news organization is owned and managed by Filipinos. It also said that PD 1018 only applies to "print and broadcast media."

But the SEC said in its latest statement that "the purported donation of the PDRs to the staff of Rappler neither created nor transferred any right in favor of the donees which would mitigate or cure the violation already committed."

It also said that the CA affirmed the SEC order as early as July 26, 2018; then on February 21, 2019; and again, on December 4, 2019. The Supreme Court on September 25, 2019 issued a resolution declaring the case closed and terminated.

Ressa said Rappler will appeal the decision and it is "business as usual" in the news organization.

Meanwhile, Rappler lawyer Francis Lim, a former Philippine Stock Exchange president, disagrees that the news outlet violated the Constitution. Their camp has 15 days to file a petition for review to the Court of Appeals. He said the SEC cannot enforce the shutdown during the appeal period.

The National Union of Journalists of the Philippines slammed the SEC order, noting that this comes on the heels of the National Telecommunications Commission's move to block alternative news sites Bulatlat and Pinoy Weekly and to regulate blocktime broadcasting arrangements.

"Throughout the six years of the Duterte administration, we have seen lawsuites and regulatory processes used as tools to muzzle the press and these, as much as the touted infrastructure projects, form part of the Duterte legacy," the NUJP statement read.

"It is clear now, if it had not been clear before, that the journalism community and the communities that we report about and for must stand together against government moves to harass, restrict and silence any of us to keep the press free for all of us," it added.

READ: SEC cancels Rappler's license to do business

Speaking to CNN Philippines, Danilo Arao, associate professor at the University of the Philippines Diliman, said that the move is a clear attack on press freedom.

"If a certain news media organization would shut down, it should be on its own terms. It should not be based on any government imposition. To be frank about it, we don't want SEC, or any other government instrumentality, being weaponized for harassment and intimidation of the media," he noted.

Arao pointed out that the issue now is not just about Rappler, but also about the attacks being done against news organizations.

Such attacks should be exposed as being concerted efforts towards normalizing media repression, he argued.