Rappler execs no-show at DOJ probe on tax evasion raps

MANILA Rappler Holdings Corp. (RHC) officers did not show up during Tuesday's preliminary investigation at the Department of Justice (DOJ) on the tax evasion complaint filed by the Bureau of Internal Revenue (BIR) for allegedly failing to pay PHP133 million in taxes.

Facing tax evasion raps are RHC president Maria A. Ressa and treasurer James C. Bitanga for violation of Sections 254 and 255 of the National Internal Revenue Code (NIRC) for willful attempt to evade or defeat tax, and for deliberate failure to supply correct and accurate information in its annual income tax return (ITR) and value-added tax (VAT) returns for 2015.

During the hearing, Assistant State Prosecutor Zenamar Machacon-Caparros said Ressa and Bitanga were represented by their lawyers who sought for an extension to submit the counter-affidavit because they did not receive the BIR's complaint.

Caparros gave a copy of the complaint to the respondents' lawyers and scheduled the preliminary investigation at 11 a.m. on May 7, where Ressa and Bitanga are set to file their counter-affidavit to the complaint.

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

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 2015.

It 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 bureau 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 on Wednesday in connection with the cyberlibel complaint filed by businessman Wilfredo Keng regarding an article Rappler had published in 2012.

Senior State Prosecutor Edwin Dayog has started 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 on Wednesday.

The respondents have been accused of committing libel under Section 4, paragraph (c), sub-paragraph (4) of Republic Act No. 10175, or 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 last Feb. 28, 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 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 its petition, it 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.

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 CA Justice Rafael Santos, along Justices Socorro Inting and Apolinario Bruselas.

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

"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 Rappler's plea to stop the SEC from revoking its license to operate.

Source: Philippine News Agency

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