Philippines

SEC revokes Rappler’s certificate of incorporation

In a decision issued on Monday, the SEC cancelled the registration of Rappler, Inc., the mass media entity that “sold control” to foreigners, and Rappler Holdings Corporation being its alter ego, “existing for no other purpose than to effect a deceptive scheme to circumvent the Constitution.”

It cited foreign equity restriction in the Constitution, Presidential Decree and the Securities Regulation Code that provide that “the ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations or associations wholly owned and managed by such citizens.”

The SEC En Banc also declared Omidyar Philippine Depository Receipts (PDR) void for “being a fraudulent transaction within the ambit of Section 26.1 of the Securities Regulation Code.”

In October 2015, Rappler Holdings Corp. issued 7,217,257 PDRs covering shares of Rappler Inc. designated as ON PDRs because they were sold to Omidyar Network Fund LLC, a foreign juridical entity.

Rappler Holdings publicly reported that it received an investment from Omidyar Network LLC.

It also issued PDRs covering shares of Rappler Inc. to NBM Rappler L.P., a foreign juridical entity. NBM Rappler L.P. was founded and co-owned by North Base Media Ltd., a foreign juridical entity. (PNA)

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