craig aquino,
A recent Securities and Exchange Commission (SEC) decision revoked the registration of social news network Rappler.
The decision hinged around Philippine Depositary Receipt (PDR) shares covering Rappler, Inc. which were issued by Rappler Holdings Corporation to Omidyar Network (ON), a foreign company. PDRs do not give entities ownership or voting rights to a company.
However, the SEC found that the ON PDR contained a ‘repugnant provision’.
Provision 12.2.2 of the PDR prohibited Rappler, Inc. from changing its by-laws without ‘prior good faith discussion with the ON PDR Holders’ and ‘the approval of PDR Holders holding at least two-thirds (2/3s) of all issued and outstanding PDRs’.
They found this in violation of Article XVI, section 11 (1) of the 1987 Philippine Constitution, which prohibits foreign entities from owning or managing Philippine mass media outlets.
However, Rappler claims it did not violate the constitution, citing that the PDRs did not grant Omidyar ownership of the company.
Did the SEC findings have merit? Perhaps.
However, the bigger issue lies in the fact that the SEC immediately revoked Rappler’s registration. This decision was brash and is an affront to press freedom.
The only issue that the SEC found was that a single provision of a PDR granted a foreign company minimal influence over Rappler. Even if they were given the benefit of the doubt, and that Rappler did violate the constitution, was their decision fair? No.
Rappler could have easily been given time to rectify the offending provision.
In 2017, the Philippine Long Distance Telephone Company (PLDT) was also investigated by the SEC due to issues with foreign ownership. As with Rappler, it was also found to have violated the constitutional limit for the foreign ownership of companies. However, PLDT was given time to rectify the issue, instead of being suspended immediately.
The SEC did not give this consideration to Rappler, despite Omidyar having shown that it was willing to give up the provision by submitting a waiver declaring it null and void.
Some suspect that the decision was an act of political pressure. Rappler has shown itself to be critical of the administration’s policies, and has drawn the ire of President Rodrigo Duterte and his supporters. Several pro-Duterte bloggers, and even the president himself have spoken against Rappler, calling it ‘fake news’.
The president, however, denies any involvement in the decision.
Regardless of that, the issue still remains: Rappler was treated unfairly.
The constitution guarantees a free press, and that free press is necessary to every democracy. Without it, people will remain uninformed and ignorant, and those in power are given free reign to take advantage of those they have power over.
That free press is already threatened by the spread of fake news and the rise of anti-media sentiments.
This decision only further threatens that free press by giving unnecessarily harsh punishment to a news outlet serving the people, and preventing journalists from effectively doing their jobs.
When investigations into Rappler’s possible violation of the constitution began, the SEC may have been acting in defence of that law. Ultimately, however, the SEC has also acted against it.//by Craig Aquino
Opinion: Defend Press Freedom
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| Photo Credit: Gail Clemente |
The decision hinged around Philippine Depositary Receipt (PDR) shares covering Rappler, Inc. which were issued by Rappler Holdings Corporation to Omidyar Network (ON), a foreign company. PDRs do not give entities ownership or voting rights to a company.
However, the SEC found that the ON PDR contained a ‘repugnant provision’.
Provision 12.2.2 of the PDR prohibited Rappler, Inc. from changing its by-laws without ‘prior good faith discussion with the ON PDR Holders’ and ‘the approval of PDR Holders holding at least two-thirds (2/3s) of all issued and outstanding PDRs’.
They found this in violation of Article XVI, section 11 (1) of the 1987 Philippine Constitution, which prohibits foreign entities from owning or managing Philippine mass media outlets.
However, Rappler claims it did not violate the constitution, citing that the PDRs did not grant Omidyar ownership of the company.
Did the SEC findings have merit? Perhaps.
However, the bigger issue lies in the fact that the SEC immediately revoked Rappler’s registration. This decision was brash and is an affront to press freedom.
The only issue that the SEC found was that a single provision of a PDR granted a foreign company minimal influence over Rappler. Even if they were given the benefit of the doubt, and that Rappler did violate the constitution, was their decision fair? No.
Rappler could have easily been given time to rectify the offending provision.
In 2017, the Philippine Long Distance Telephone Company (PLDT) was also investigated by the SEC due to issues with foreign ownership. As with Rappler, it was also found to have violated the constitutional limit for the foreign ownership of companies. However, PLDT was given time to rectify the issue, instead of being suspended immediately.
The SEC did not give this consideration to Rappler, despite Omidyar having shown that it was willing to give up the provision by submitting a waiver declaring it null and void.
Some suspect that the decision was an act of political pressure. Rappler has shown itself to be critical of the administration’s policies, and has drawn the ire of President Rodrigo Duterte and his supporters. Several pro-Duterte bloggers, and even the president himself have spoken against Rappler, calling it ‘fake news’.
The president, however, denies any involvement in the decision.
Regardless of that, the issue still remains: Rappler was treated unfairly.
The constitution guarantees a free press, and that free press is necessary to every democracy. Without it, people will remain uninformed and ignorant, and those in power are given free reign to take advantage of those they have power over.
That free press is already threatened by the spread of fake news and the rise of anti-media sentiments.
This decision only further threatens that free press by giving unnecessarily harsh punishment to a news outlet serving the people, and preventing journalists from effectively doing their jobs.
When investigations into Rappler’s possible violation of the constitution began, the SEC may have been acting in defence of that law. Ultimately, however, the SEC has also acted against it.//by Craig Aquino
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