Rappler execs set to appear at probe on tax evasion, cyber libel raps

MANILA The Rappler Holdings Corp. (RHC) and its officers are expected to appear at the Department of Justice (DOJ) on Tuesday and Wednesday for the preliminary investigation of the separate complaints filed by the Bureau of Internal Revenue (BIR) and the National Bureau of Investigation (NBI).

Assistant State Prosecutor Zenamar Machacon-Caparros has summoned the respondents, namely RHC president Maria A. Ressa and treasurer James C. Bitanga, to appear at the preliminary investigation slated to begin on April 24 at 11 a.m. where they will be given a chance to explain their side on the tax evasion complaint filed by the BIR against RHC for allegedly failing to pay PHP133 million in taxes.

"You are hereby warned that failure on your part to comply with this subpoena shall be considered as a waiver to present your defense and the case shall be considered submitted for resolution based on the evidence on record," read the DOJ subpoena.

Ressa and Bitanga face tax evasion raps for violation of Sections 254 and 255 of the National Internal Revenue Code (NIRC) "for willful attempt to evade or defeat tax and for (their) deliberate failure to supply (the) correct and accurate information in its annual income tax return (ITR) and value-added tax (VAT) returns for 2015."

The BIR alleged that the company is liable for non-payment of PHP133,841,305 broken down into PHP91,320,481 in income tax and PHP42,520,824 in VAT for the year 2015

Based on the BIR complaint filed last March 8, RHC purchased common shares from Rappler, Inc. worth PHP19,245,975. Then, it issued and sold Philippine Depository Receipts (PDRs) to two foreign firms worth PHP181,658,758.

BIR said RHC used the same common shares it purchased from Rappler as the underlying share of the PDRs for profit and transmitted economic rights to the PDR holders.

The agency explained that RHC is subject to income tax and VAT, being a dealer in securities. However, the annual ITR and VAT returns for 2015, according to the BIR, does not reflect any IT and VAT from the PDR transaction.

Meanwhile, Ressa and eight others are also set to respond this Wednesday in connection with the cyber complaint filed by businessman Wilfredo Keng regarding an article it has published in 2012.

Senior State Prosecutor Edwin Dayog has already began conducting the preliminary investigation over the case that was filed by the NBI last March.

Dayog had directed the respondents namely Ressa, former Rappler reporter Reynaldo Santos, Jr., who wrote the article in question, and directors and officers Manuel Ayala, Nico Jose Nolledo, Glenda Gloria, James Bitanga, Felicia Atienza, Dan Alber De Padua, and Jose Maria G. Hofilena to file their counter-affidavits this Wednesday.

The respondents have been accused of committing libel under Section 4, paragraph (c), sub-paragraph (4) of Republic Act 10175, the Cybercrime Prevention Act of 2012.

The complaint filed by Wilfredo Keng for a violation of the Cybercrime Law because of the article "CJ using SUVs of 'controversial' businessmen" that Santos wrote and that Rappler published on May 29, 2012.

Rappler reported that the late former Chief Justice Renato Corona, who was then facing an impeachment trial, had been using a black SUV whose plate number was allegedly issued to Keng.

The news website also reported about Keng's alleged involvement in human trafficking and smuggling.

The NBI said Keng submitted a supplemental affidavit on February 28 this year, in which he alleged, citing jurisprudence, "that the prescriptive period for crimes falling under Section 4(c)(4) (of the Cybercrime Prevention Act of 2012) is 15 years."

According to the NBI, Keng said the article where his complaint stemmed from is still published online.

The NBI is also conducting a probe into the possible criminal liabilities of the executives of online news website Rappler for supposedly violating the constitutional prohibition on foreign ownership of mass media.

Last January, the Securities and Exchange Commission (SEC) revoked the certificate of incorporation of Rappler, Inc. and RHC allegedly for violating the Constitution and foreign equity restrictions in mass media.

The SEC stated that Rappler violated the Foreign Equity Restrictions in Mass Media enshrined in the 1987 Constitution and enforceable through the Mass Media Law, Anti-Dummy Law, and the Foreign Investment Act.

Article XVI, Section 11 (1) of the Constitution states, The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.

Rappler filed a petition before the Court of Appeals (CA) seeking to stop the implementation of the decision made by SEC.

In their petition, they asked the appellate court to reverse and set aside the SEC en banc decision dated Jan. 11, claiming that the SEC issued the assailed order hastily that it violated their constitutional right to due process.

Rappler argued that the ruling was done in the absence of a formal charge, which was supposed to be required in the commission's rules.

"There was also no formal administrative action filed against Rappler and RHC before the SEC. Without an administrative action, surely, no administrative action, including the suspension or revocation of the corporation's franchise, could have been imposed by the SEC," read the petition.

In a resolution dated Feb. 7, the CA's 13th Division ordered the SEC to file its comment within 10 days from notice, giving the petitioners five days to reply.

The resolution was approved by its ponente, CA Justices Rafael Santos, along with CA Justices Socorro Inting and Apolinario Bruselas.

In addition, both parties were ordered to notify the Court of any other pending cases involving the same issues at hand.

"The parties are required to promptly notify this Court of any other cases or proceedings involving the same parties and issues in the Court or other courts within five days from knowledge thereof, pursuant to the directive of the Supreme Court in AM No. CA 13-51-J dated July 2, 2013," it said.

Santos will make his study and recommendation on the plea of Rappler to stop the SEC from revoking their license to operate. (PNA)

Source: Philippine News Agency