Shut down Rappler now, Gadon tells SEC, Govt.
No need to wait for appeals process to conclude
KILUSANG Bagong Lipunan (KBL) senatorial candidate and maverick lawyer, Atty. Larry ‘Kidlat’ Gadon, called on the Securities and Exchange Commission (SEC) to start implementing its 2018 decision cancelling the corporate registration of ‘Rappler Philippines, Inc.,’ without waiting for the result of an appeal the foreign-funded and foreign-owned media entity filed before the Court of Appeals.
In a statement last March 11, 2022, Gadon stressed the revocation of the corporate registration of Rappler due to violation of the Constitution against foreign ownership is “already final and conclusive.”
“The Court of Appeals has no jurisdiction to overturn the SEC because the approval or denial of a corporate registration is a regulatory power of the SEC,” Gadon explained.
“If an applicant does not comply with the requirements, if it is not compliant to the laws, then the SEC cannot be compelled to grant registration (to any corporation),” he added.
It can be recalled that in a ruling handed down last January 11, 2018, the SEC, chaired by Teresita Herbosa, announced the revocation of Rappler’s corporate registration after confirming that the online media company “sold (corporate) control to foreigners.”
Aside from this, the SEC also found Rappler guilty of violating the Anti-Dummy Law (Commonwealth Act 108, as amended by PD 715), the Corporation Code (RA 11232) and the Securities Regulation Code (RA 8799), based on the result of its investigation docketed under Special Proceeding (SP) 08-17-001 of the SEC
In the same ruling, the SEC also announced the revocation of the corporate registration of ‘Rappler Holdings, Inc.,’ which the country’s corporate regulator found as “existing for no other purpose than to effect (a) deceptive scheme to circumvent the Constitution.”
The 1987 Constitution states that “ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly owned and managed by such citizens.”
Thru Rappler Holdings, Rappler received capital infusion of over US$1 million (about P78 million) from Omidyar Network Fund, LLC, owned by eBay founder, Pierre Omidyar. The SEC described this as a “fraudulent” transaction under RA 8799.
As a matter of course, the SEC also voided the ‘PDRs’ (Philippine Depository Receipts) that Rappler Holdings issued to Omidyar, the latter notorious for funding media groups worldwide with the aim of destabilizing governments deemed inimical to the interests of the United States.
The country’s corporate regulator voided the PDRs, saying it is another “fraudulent” arrangement between Rappler Holdings and Omidyar.
The SEC decision was triggered by a letter from Solicitor General Jose Calida last December 22, 2016, requesting for a probe on Rappler’s association with foreigners.
Rappler has since appealed the commission’s ruling but last November 22, 2021, the SEC stand firm on its decision against Rappler (see also Pinoy Exposé article of November 24, 2021).
The cases against Rappler are now pending before the CA.
But according to Gadon, the CA “may only acquire jurisdiction on matters involving intra-corporate disputes between and among stockholders but not on the power of the SEC on regulatory matters.”
“So, when the SEC revoked the registration of Rappler, it is what it is—revoked—as if it does not exist anymore. Hence, it is not subject to appeal; they have to re-apply,” Gadon said.
Rappler’s corporate character as a foreign-funded media organization was again highlighted after the National Press Club (NPC), the country’s biggest organization of active members of the press, vehemently objected to an agreement entered into by Rappler with the Commission on Elections (COMELEC) last February 24, 2022, related to the coming May 9, 2022, elections.
Aside from its foreign ownership, the NPC also pointed to Rappler’s lack of credibility and objectivity as a media entity, thus putting the credibility of the coming elections in serious doubt.
The poll body, thru its spokesperson, Dir. James Jimenez, had initially insisted that their MOA with Rappler would continue, claiming its legal problems, especially its existence as a corporation, is yet to be decided “with finality.”
But last March 8, 2022, the COMELEC, thru acting chair, Socorro Inting, announced the “suspension” of the MOA with Rappler after Calida, a day before and in his role as ‘Tribune of the People,’ filed a petition before the Supreme Court to stop the MOA.
Despite the suspension of the MOA, the NPC announced it would file a separate petition before the SC in support of the OSG’s action.
Gadon, for his part, added: “The MOA between Comelec and Rappler is void because Rappler has no legal personality to enter into contracts.
“The appeal to the CA is a mere trash of paper. The revocation of a corporate registration is not a like a criminal or civil case, which if appealed before the CA and SC, does not attain finality pending appeal.
“The SEC registration is not a case, it is an (exercise of the) regulatory power of the SEC.
“Can the Court of Appeals order the LTO (Land Transportation Authority) to grant license to someone who does not know how to drive, but was given a license by mistake or was given one after employing deceptive means to do so?
“Can the Court of Appeals compel the Professional Regulation Commission (PRC) to grant license to a doctor who failed the board exams? Of course not!”
As the SEC has long ago submitted its report and recommendation to the Department of Justice (DOJ) according to Herbosa, Gadon said it is now imperative for DOJ Secretary Menardo Guevarra to act on the closure of Rappler as soon as possible.
