Omidyar Network donates PDRs to Rappler managers

MANILA, Philippines (UPDATED) – Saying Rappler should operate unhindered, philanthropic investment firm Omidyar Network on Wednesday, February 28, announced it has donated its Philippine Depositary Receipts (PDRs) to 14 Filipino managers of the social news network.

Omidyar did this "to address the unwarranted ruling" made by the Philippine Securities and Exchange Commission (SEC) to revoke Rappler's registration because of Omidyar's PDRs. (READ: TIMELINE: The case of Rappler's SEC registration)

"This donation completely eliminates the sole basis of the SEC ruling against Rappler Incorporated and Rappler Holdings Corporation. We therefore strongly believe that the companies should be allowed to continue operating unhindered in the Philippines," said Omidyar partner Stephen King in a conference call on Wednesday.

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.

The SEC on January 11 revoked Rappler's license to operate because the PDRs of Omidyar supposedly violate the constitutional restrictions on ownership. (READ: FAQs: Rappler's SEC case)

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." (READ: EXPLAINER: How SEC's Rappler decision is a test case for press freedom)

"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. 

Omidyar is donating its PDRs to the following Rappler managers:

Rappler on Wednesday thanked Omidyar for its donation.

"Between then and now, independent media in the Philippines, including Rappler, has come under attack. We therefore welcome Omidyar Network's decision to donate its investment to Filipino Rappler managers," Rappler CEO Maria Ressa said in a statement in the same conference call on Wednesday.

"This generous act proves that Rappler is, as it has always been, Filipino-owned and -controlled," Rappler added.

This also shows that Omidyar "remains committed to supporting independent, investigative, and innovative media organizations globally," the social news network said. (READ: Stand with Rappler, defend press freedom)

"SEC Chairperson Teresita Herbosa has repeatedly said that the SEC decision was not politically motivated," Rappler said. "Now the government has a chance to prove it."

Sought for comment, Herbosa said that the issue "is for CA (Court of Appeals) to pass upon since the case is already pending there by way of appeal."

"The SEC decision's legal basis has not changed insofar as SEC is concerned," Herbosa said. 

Read Omidyar Network's full statement below:

Today, Wednesday, February 28, Omidyar Network announced that it has donated the Philippine Depositary Receipts (PDRs) it held to 14 managers of Rappler Inc, all of whom are Filipino citizens.

We have taken this action in order to address the unwarranted ruling made by the Philippines Securities and Exchange Commission (SEC) against Rappler Inc and Rappler Holdings Corporation.

The donation completely eliminates the sole basis of the SEC ruling against Rappler Inc and Rappler Holdings Corporation. We therefore strongly believe that the companies should be allowed to continue operating unhindered in the Philippines.

Omidyar Network's only objective has always been to enable the ongoing growth and success of these companies, and to support their dedicated journalists in providing independent, impartial, and credible news.

This action also reaffirms our intention that Rappler Inc and Rappler Holding Corporation should continue to operate as fully independent, Filipino-owned and -run companies, and highlights that Omidyar Network never had any control or influence over their management, operations, or editorial policy.

This has been a clear and direct attack not only on Rappler Inc but also on independent journalism and press freedom in the Philippines.

Independent and investigative journalists, such as the highly committed team at Rappler Inc, 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. 

Read Rappler's full statement below:

When Omidyar Network invested in Rappler in 2015, it was in recognition of our groundbreaking news coverage, reader engagement model, and community building efforts. These fit into Omidyar's mission of advancing social good through information and technology.

Between then and now, independent media in the Philippines, including Rappler, has come under attack. 

We therefore welcome Omidyar Network’s decision to donate its investment to Filipino Rappler managers. 

This generous act proves that Rappler is, as it has always been, Filipino-owned and controlled. 

It also demonstrates that Omidyar Network, in whatever capacity, remains committed to supporting independent, investigative, and innovative media organizations globally.

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.com