RAPPLER’s foreign investor Omidyar Network announced Wednesday it was donating its $1.5-million investment to the media agency’s 14 Filipino managers, in a move seen by industry observers as an attempt to resolve foreign ownership issues.
“This completely eliminates the basis of the unwarranted SEC [Securities and Exchange Commission] ruling,” Stephen King, Omidyar’s head of Global Governance and Citizen Engagement, said in a statement Wednesday.
But Malacañang downplayed the announced donation, saying there was a breach of the 1987 Constitution.
The investment will be split equally among senior managers Jennifer V. Chua, Marie Fel D. Dalafu, Stacy Lynne M. de Jesus, Lilibeth Socorro L. Frondoso, Glenda M. Gloria, Dominic Gabriel L. Go, Miriam Grace A. Go, Natashya Marianne L. Gutierrez, Maria Rosario F. Hofileña, Gemma B. Mendoza, Pauline Gel C. Occeñola, Libertad G. Pascual, Maria A. Ressa, and Anne Louise B. Yosuico.
“We…strongly believe that the company should be allowed to continue operating unhindered in the Philippines,” King said.
Omidyar Network, owned by eBay founder Pierre Omidyar, however, clarified it was not “cutting ties” with Rappler.
The move, it said, would remove the “barriers put in place” by the government when the SEC revoked the licenses of Rappler Inc. and Rappler Holdings Corp. in January for violating foreign ownership restrictions.
Rappler CEO Maria Ressa welcomed Omidyar’s decision.
A PDR is a financial instrument that allows foreigners to invest in a Filipino company without owning any part of it or being involved in day-to-day management.
In Malacañang, Presidential Spokesman Harry Roque, in a statement, said: “Omidyar Network’s reported donation of its Philippine Depositary Receipts to its Filipino managers does not remove the fact that Rappler breached the Constitution.
“This latest act is nothing but a circumvention of the law, which restricts ownership of media entities in the country to 100 percent Filipino-owned.
“Rappler’s defense of infringement of press freedom is merely a ploy to distract from the real issue, as resolved by the Securities and Exchange Commission that the former is a foreign entity.”
The SEC on Jan. 11 revoked Rappler’s license to operate because the PDRs of Omidyar supposedly violated the constitutional restrictions on ownership.
The Omidyar PDRs state that Rappler Holdings Corp., the parent company of Rappler, needs to seek the approval of two-thirds of PDR holders on corporate matters.
This includes changes in the nature of Rappler’s business, for example.
Omidyar said the SEC ruling “is a clear and direct attack not only on Rappler Incorporated but also on independent journalism and press freedom in the Philippines.”
“We believe that independent and investigative journalists, such as the highly committed team at Rappler, should not have to put their jobs, freedom, and safety at risk to provide impartial news coverage. We must support and protect these courageous journalists around the world, otherwise the press will lose objectivity, trust, and the ability to hold those in power to account,” Omidyar said.