(Eagle News) – The Department of Justice has directed the National Bureau of Investigation (NBI) to probe deeper into the possible violations of the Constitution and other laws by online news site Rappler.
Through Department Order No. 17, Justice Secretary Vitaliano Aguirre II tasked the NBI, through Director Gierran, to conduct a “case build-up” against Rappler, and to file the “appropriate cases against those found liable.”
The order dated January 17, 2018 takes effect immediately.
“Director Gierran shall submit a report to the Office of the Secretary of Justice on its current activities related to the implementation of this Order,” Aguirre said in his order.
On Monday, the Securities and Exchange Commission (SEC) released a ruling dated January 11, 2018, revoking the certificate of incorporation of Rappler and its holding company, Rappler Holdings Incorporated for violating the Foreign Equity Restriction of the Constitution that strictly stated that mass media in the Philippines should be 100 percent Filipino-owned.
“The Foreign Restriction is very clear. Anything less than one hundred percent (100%) Filipino control is a violation. Conversely, anything more than exactly Zero Percent (0%) foreign control is a violation,” the SEC decision read.
-SEC cites laws violated by Rappler –
The Foreign Equity Restriction is found in Article XVI Section 11(1) of the Constitution which provided that: “The 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.”
The SEC also cited Section 2 of the Presidential Decree 1018, Limiting the Ownership and Management of Mass Media to Citizens of the Philippines.
It also cited the 2015 Implementing Rules and Regulations of the Securities Regulation Code, in its ruling, clarifying that “control” is not equated “with either ownership of stock or with management as director or officer.”
It accused Rappler of committing what may be considered “a species of Securities Fraud” when it circumvented the foreign equity restrictions enshrined in the Constitution through a sale of securities to foreign entities, the Omidyar Network and North Base Media.
In its investigation, the SEC found that Rappler and its holdings company, Rappler Holdings Corporation, issued Philippine Depository Receipts (PDR) to the foreign entities North Base Media (NBM) thru NBM Rappler, LP, and Omidyar Network.
-Foreign firms connected to Rappler —
The SEC investigation showed a certificate of Registration of Expanded Limited Partnership, issued in the Cayman Islands to NBM Rappler, L.P.
The SEC investigation also has a certification of partnership interest issued in the Cayman Islands to NBM Rappler, LP, as well as a Certificate of Formation issued in Wilmington. Delaware, USA to Omidyar Network Fund LLC.
In 2015, Rappler Holdings Corporation issued 264,601 PDRs to NBM Rappler, LP on May 29, 2015; another 11,767,117 PDRs to NBM Rappler, LP on July 29, 2015; and more than 7 million PDRs (7,217,257 PDRs) to Omidyar Network Fund LLC.
SEC said Rappler also violated Section 1 of the Commonwealth ACT 108, or the Anti-Dummy Act, which penalizes any citizen of the Philippines who allows his name or citizenship to be used for the purpose of evading constitutional or legal provisions whoch require Philippine or any other specific citizenship as a requisite for the enjoyment of a right, franchise or privilege.
“This may include a situation where a person allows disqualified foreigners to obtain a derivative that grants a measure of control over corporate matters, especially where the Constitution is very clear that there must be no foreign control whatsoever,” the SEC noted in its ruling.
Rappler had claimed the SEC ruling was nothing more than a blow to press freedom, and vowed to fight the ruling and contest this even up to the Supreme Court.
On Tuesday, however, no less than President Rodrigo Duterte hit Rappler for abusing the privilege of freedom of speech and of the press, citing its alleged propensity to publish “fake news.”
He called Rappler a “fake news outlet.”
(Eagle News Service)
