Online news organization Rappler Inc. and and its controlling stockholder Rappler Holdings Corp. filed a petition for review before the Court of Appeals on the Securities and Exchange Commission’s order to revoke their certificates of incorporation for violating a Constitutional restriction on foreign ownership in mass media.
Rappler and RHC, through their legal counsel Francis Lim, also sought to overturn the SEC order, which it described as “too severe and grossly disproportionate” compared to the violation it has committed.
Rappler said it should have given due process considering that its violation did to result in injury to the public.
The SEC ruling, Rappler said, also deprives other investors and stockholders of the company of their right to returns on their investments.
“In hastily issuing the assailed decision to put rappler and RHC out of business and void the Omidyar PDS, the SEC en banc deprived them of their constitutional right to due process. In applying a procedure different from that found in the SEC riles, the SEC en banc deprived Rappler and RHC of equal protection of the law. As cub the assailed decision is void,” Rappler said in its petition.
Early last month, the SEC revoked the certificates of incorporation of Rappler and RHC and declared void the Philippine Depository Receipts (PDRs) issued to the Delaware-based Omidyar Network Fund LLC.
According to the SEC, the PDRs issued by Rappler to Omidyar gave the foreign entity some “control” over the media entity as it allowed Omidyar to have a say on corporate matters.
Rappler and RHC, however, explained that the Omidyar PDR does not grant control or ownership and management over Rappler.
“As such, the SEC en banc has no basis to declare void the Omiddyar PRD and revoke the certificates of incorporation of Rappler and RHC,” Rappler said.
Rappler also noted that there has been no finding by the SEC that Omidyar actually exercised control over Rappler.