Duterte Critic's News Outlet Loses Appeal on Foreign Ownership

(Bloomberg) -- A Philippine news website critical of President Rodrigo Duterte violated a constitutional ban on foreign ownership in media companies, the Court of Appeals said in a decision released Monday.

Rappler Inc. cannot claim that it is 100-percent Philippine-owned as required by law, the appeals court said, standing by its earlier decision affirming Securities and Exchange Commission’s closure order.

The court said Rappler’s U.S.-based investor, Omidyar Network, was “granted the power to direct the voting” on the media company’s shares through a clause in its depository receipt, which is “tantamount to some foreign control” based on its July ruling.

Rappler’s head, Maria Ressa, said via Twitter the news site “will continue to challenge legally” the court decision, and maintained its foreign investor does not have editorial or business control over the media company.

At the same time, the appeals court in its latest decision reiterated its order to the SEC to re-examine its decision to shut Rappler. Foreign control on the media company “appears to have been permanently removed” after Omidyar donated its depository receipts to the website’s local managers last year following the closure order, it said.

Ressa was arrested and granted bail in February for an online libel case. One of Time Magazine’s Persons of the Year in 2018, she is also facing separate tax evasion charges filed by the Department of Justice. She refutes all charges.

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