Investor Omidyar donates money in Rappler to Filipino managers

Omidyar Network, one of the companies holding Philippine Depositary Receipts (PDRs) in Rappler Inc., said on Wednesday it has decided to donate its investment in the media company to refute a recent ruling of the Securities and Exchange Commission (SEC).

“This donation completely eliminates the sole basis of the SEC ruling against Rappler Incorporated and Rappler Holdings Corporation,” Omidyar partner Stephen King was quoted as saying in a report by Rappler.

The PDRs were donated to 14 Filipino managers of Rappler, but it did not elaborate.

In a January 11 decision, the SEC revoked the certificate of incorporation of Rappler Inc. for supposedly violating the foreign ownership restrictions on mass media companies after welcoming Omidyar Network as one of its investors through Philippine Depositary Receipts (PDRs).

According to the SEC decision, Rappler welcomed Omidyar Network—which the media organization said is the fund created by eBay founder and entrepreneur Pierre Omidyar and his wife Pam—as an investor in the online mass media outlet.

“The Foreign Equity Restriction is very clear. Anything less than One Hundred Percent (100 percent) Filipino control is a violation,” the SEC decision read.

The Philippine Stock Exchange defines a depositary receipt as security which grants the holder the right to the delivery of sale of the underlying share. PDRs, however, are not evidence or statements nor certificates of ownership of a corporation.

Rappler has since asked the Court of Appeals (CA) to nullify the SEC decision, and CEO Maria Ressa claimed it was all about “political pressure.”

President Rodrigo Duterte denied such claim, saying his office “never had a hand” in it.

“SEC Chairperson Teresita Herbosa has repeatedly said that the SEC decision was not politically motivated ... Now the government has a chance to prove it,” Rappler said in a separate statement on Wednesday.

Herbosa said Rappler has not yet notified the SEC on the latest development, but it is studying its impact on the January 11 decision.

“Studying this in light of pendency of case with CA,” Herbosa told GMA News Online.  —VDS, GMA News