Palace: Rappler foreign investor's move an 'admission' of Constitution violation

Metro Manila (CNN Philippines, March 1) —  A foreign investor's move to donate its investment to Rappler's Filipino managers is an admission that the online news agency violated the law, Presidential Spokesperson Harry Roque said Thursday.

"It's an admission against interest. They violated our Constitution because they said now it removes the only obstacle that keeps Rappler from operating," he said in a media briefing.

Rappler's foreign investor Omidyar Network announced Wednesday it is donating its $1.5-million (around ₱78 million) investment — made in the form of Philippine Depositary Receipts (PDR) — to the media agency's 14 senior managers.

A PDR is an investment in a local company where the holder has the right to earn without having an equity stake.

Related: Omidyar Network donates investment to Rappler's Filipino managers

Stephen King, Omidyar's Head of Global Governance and Citizen Engagement, said the group's move meant to resolve foreign ownership issues, "completely eliminates the basis of the unwarranted SEC (Securities and Exchange Commission) ruling."

Rappler's license to do business was revoked on January 11 after the SEC said it breached the constitutional ban on foreign ownership in mass media.

"I think they (Rappler) acknowledge that their PDR contravenes the Constitution and our existing laws," Roque said.

He added the donation of interest will not change the ruling of SEC, but it will only strengthen it.

"I doubt if that will cure it (SEC ruling) because it has already been declared as void... It strengthens the ruling of the SEC, because it's an acknowledgement that they violated the Philippine Constitution and they're hoping to rectify it," Roque said.

The donation, however, should not be interpreted as an admission of wrongdoing, Rappler and Omidyar said.

"I would never admit that we were wrong because our position has always been that we created Rappler to be independent," Rappler Chief Maria Ressa said.

Meanwhile, the SEC said in a statement the Omidyar donation must be coursed through the Court of Appeals.

"Considering that the Commission's Decision against Rappler is currently pending appeal before the Court of Appeals, any action on this supervening event must be coursed through the Honorable Court through an appropriate pleading or manifestation," it said.

The SEC added it is "internally studying" the development to determine its next action before the Court of Appeals.