Court of appeal at SEC: Give Rappler corrective period

SEC CASE. Rappler's president, Maria Ressa, is holding a press conference on January 15, 2018, after the Securities and Exchange Commission (SEC) revoked the company's operating license. Photo by LeAnne Jazul / Rappler

MANILA, Phillipines (4th UPDATE) – The Court of Appeals (CA) upheld the Securities and Exchange Commission's (SEC) findings that the Rappler Accord with a foreign investor constitutes a "foreign control" contrary to the Constitution, but said Rappler must be given "reasonable time" to correct the disputed parts of the case.

"The Court notes that, in cases where the articles of incorporation or any amendment thereto is found by the SEC to be in non-compliance with the requirements of the Companies Code, under Article 17 of the Companies Code, the SEC's mandate is to give the founders a reasonable period of time to correct or amend the wrongdoing in their articles of incorporation or amendment, said in a 72-page decision promulgated on Thursday, July 26.

The AC was in agreement with Rappler's argument that Omidyar's earlier waiver to his Filipino Certificates of Deposit (PDR) and then his donation of the PDRs to Rappler's directors "shows the intention to comply in good faith with the SEC's regulations." (Read Rappler's statement: The court of appeal states that the revocation of the license is false )

CA even noted that the SEC has put at other companies like ABS-CBN, GMA and Globe to issue PDRs.

"The SEC, in the past, had pursued a policy that the revocation of the certificate of registration should be the last resort," said the competent authority

The Court reminded the SEC that in 2015, the SEC in bank relaxed its policy against "delinquent corporations"

Rappler is allowed to operate, but the part of the decision of the Court does not mention a guideline stating whether Rappler should stop operating.

Instead, the AC returned the case or sent it back to the SEC to assess the legal impact of Omidyar donated his PD from [15milliondedollarsen1965-1914] Rs to 14 Philippine managers of Rappler.

"The Securities and Exchange Commission is responsible for conducting an assessment of the [39] the legal effect of Omidyar Network's alleged donation of all Filipino Certificates of Deposit to the person Accordingly, the matter is hereby referred to the Securities and Exchange Commission for this purpose, "said AC. (READ: FAQ: Rappler Case SEC)

Francis Lim, Rappler's attorney, said: "We have not yet received a copy of the decision but we will surely not make the decision and we will take all the the legal measures necessary to ensure that the issue is ultimately resolved by the Supreme Court.However, I am pleased that the Court of Appeal has directed the SEC to conduct other procedures to determine the issue. the legal effect of the RDP donation to Rappler's Philippine staff This means that the SEC's decision can not be enforced or enforced until the matter is definitively decided. Meanwhile, this is the case. is the usual work for Rappler "

Some Foreign Control

The SEC revoked the license of Rappler to operate in January 2018, stating that the Philippines Receipts Receipts (PDR ) sold by Rappler to Omid yar gave the foreign entity control of the company. According to the Constitution, media companies should have no foreign control. (READ: Chronology: The Case of Recording SEC Rappler)

The Clause states that Rappler must have a "prior bona fide discussion" with Omidyar before the company can amend its statutes so as to "prejudice rights "in relation to Omidyar PDRs. "

A PDR is a financial instrument used by companies to obtain foreign investment without violating the nationality restrictions prescribed by the Constitution.

By dismissing the petition of Rappler the authority competent stated that: "Under a foreign control standard" zero ", it would appear that this equates to foreign control."

Rappler told the AC that according to the SEC's own rules, As Mr. Rappler said, Omidyar can not vote and therefore has no control.

"It does not matter whether Omidyar's approval is required only when the actions taken by Rappler will infringe Omidyar's rights, because Rappler Holdings Corp (RHC) will still be required to obtain the approval of at least 2/3 of the holders PDR before Rappler can conduct or implement an action which has the effect of to modify, modify or change the status of Rappler or to take any other action in which such alteration, modification, modification or action will prejudice rights in Omidyar 's PRO, "said AC. 19659024] The CA adds: "While the Omidyar PDR states that the voting rights on Rappler shares are retained by RHC, this voting right is shared or exercised jointly by RHC, as owner of the shares, and Omidyar, through clause 12.2.2 Thus, under a "zero" foreign control standard, this would appear to amount to foreign control. "

The decision was written by the associate judge Rafael Antonio Santos, with the conciliations of associate judges Apolinario Bruselas and Germando Francisco Legaspi

Due process

Rappler said in his petition that the SEC violated his right to due process when it skipped several steps in his own procedure, and rendered the decision after requesting an explanation from Rappler.According to the SEC's procedures, the party may file a motion for reconsideration.

The AC stated that 39; it

"Due process in an administrative procedure can not be equated with due process in the strict sense of the term, because in the first case a formal or judicial hearing is not always necessary and the rules technical procedures are not strict. applied, "said the CA.

Rappler decried all movements as blatant harassment and an attempt to silence a free press.

The AC said: "Preliminarily, this Court notes that the exercise of freedom of the press is not a problem.It is rather about l & # 39; Exercise of regulatory powers by the SEC on domestic companies duly registered with it. "

The Justice Ministry is currently investigating Rappler for two government-lodged complaints, one for cyberlibel. , and another for tax evasion.

The National Bureau of Investigation (NBI) examines the alleged violation of the anti-dummy law. – Rappler.com