On June 28, the Philippine Securities and Exchange Commission (SEC) announced on its official website that it was shutting down Rappler, founded by Nobel Peace Prize laureate Maria Ressa, on the grounds that "the Constitution and laws restrict foreign ownership of mass media."
Resha made the news public at an international media conference in the United States the following day and said their website would not be shut down, the revocation procedure was "extremely non-compliant" and vowed to appeal.
As of press time, the Rappler website is still accessible
SEC: Philippine media must be 100% Filipino-owned
This isn't the first time the SEC has shut down Rappller, as they issued the order back in 2018 on the same grounds that it "violates the Constitution and the law's restrictions on foreign ownership of mass media."
According to the Philippine Constitution and laws, mass media is an industry on the "Negative List for Foreign Investment" and must be 100% owned by native Filipinos. Rappler's 98.77 percent stake belongs to a company called Rappler Holdings Corp (RHC), but the company accepts investment from Omidia Network, a "charitable investment company" founded by eBay founder Pierre Omidía of the United States.
Rappler was prepared for this. CnN reported on June 29 that instead of letting foreign investors buy shares in Rappler Holdings Corp directly, they sold them Philippine Depositary Receipts (PDRs – derivatives that use the value of the stock as the underlying asset, but do not grant ownership to the holders). With this approach, despite the fact that they received foreign investment, the company's shares were still 100% owned by Filipinos.
But according to the Philippine "Inquirer", the SEC made it clear in 2018 that the sale of Philippine depositary receipts to the Omidia network was a "fraudulent transaction" aimed at giving the foreign entity sufficient control without actual ownership. They stressed that the Philippine media must be 100% Filipino-owned, but in Rappler and RHC, shareholders need to negotiate with the owners of the PDR, which means that the shareholders are effectively vassals of the owners of the PDR, who are not 100% controlled by foreign investors, but are no longer 100% owned by filipinos.
The SEC announced that Rappler's series of tactics and Rappler Holdings Corp's existence were solely intended to "carry out a scheme of deception to circumvent the Constitution," in violation of the anti-fraud provisions of the Securities Regulatory Act. In an order issued in 2022, they confirmed and reiterated this, saying Rappler is a mass media outlet and that control was granted to a foreign entity through PDRs issued to the Omidia network.
Resha: It's intimidation, it's a political tactic
On June 29, Rappler CEO and founder Maria Resha made the announcement at the East-West Center International Media Conference in Honolulu, Hawaii, USA, and said their team would appeal the decision, "especially if the procedure is very abnormal." ”
She said at a news conference that Rappler has been harassed several times in the past six years, "it's intimidation, it's all political tactics, we refuse to give in to them, we don't voluntarily give up our rights ... Our goal is to continue to hold this line. Because when you give up your rights, you can never get them back. ”
In an internal statement to employees, Resha said she would appeal all the way to the Supreme Court because, in her view, the SEC's order would not be immediately enforced without court approval.
According to CNN, Maria Resha, who has dual Filipino and U.S. citizenship, has been the chief investigative reporter for Southeast Asia for nearly 20 years and has been on the cover of Time Magazine. In 2021, she was awarded the Nobel Peace Prize for bringing attention to Philippine President Rodrigo Duterte's "controversial" and "brutal" anti-drug campaign in his home country.
Three days after the award, Duterte's spokesman, Harry Roque, said Resha's award was a victory for the Philippines and not a "slap in the face" to Duterte, which showed that the Philippines has a free press and that the government has not censored anyone.
Maria Resha Image source: The Paper
Since the SEC issued the shutdown order the day before Duterte left office, many media outlets suggested that this may be related to Resha's lashing out at Duterte's administration for drug control, police corruption, weapons, and war.
Resha herself has previously said she has never shied away from criticism of the Philippine government, from the late President Benigno Aquino III's administration to Duterte's. Duterte "disassociated" from the SEC in 2018, saying he had no control over what the committee decided because most of its members were appointed by former President Benigno Aquino.
CNN said Philippines' newly elected President Marcos was due to take office on June 30, and the media urged him to be able to protect media freedom in the country, but some observers expressed concern about his relationship with the media. Some speculate that Duterle's specific policy direction will continue to dominate Philippine politics.
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