Advertisement

Rappler, top exec evaded taxes—DOJ ruling

The Department of Justice has recommended the prosecution of Rappler Holdings Corp., its president Maria Ressa, and independent certified public accountant Noel A. Baladiang for violation of the National Internal Revenue Code.

In a Resolution dated Oct. 2, Assistant State Prosecutor Zenamar J. L. Machacon-Caparros found probable cause to indict RHC, Ressa and Baladiang for willful attempt to evade or defeat tax and willful failure to supply correct and accurate information punishable under Sections 254 and 255, respectively, of the NIRC.

In its complaint, the BIR accused RHC, Ressa, and one other respondent, RHC treasurer James C. Bitanga, of failing to reflect in RHC’s 2015 tax returns the total gain of almost P162.5 million, which it realized from its issuance of Philippine Depositary Receipts to NBM Rappler L.P. (NBM Rappler) and Omidyar Network Find LLC (Omidyar〕.

A PDR is a security, which grants the holder the right to the delivery or sale of the underlying shares of stock. It derives its value from an underlying asset. As such, its value depends on the value of its underlying asset—which is the shares of stock of a corporation.

The BIR alleged that on various dates between 2014 to 2015, RHC purchase a total of 119,434,438 common shares from Rappler, Inc. at one-peso per share. RHC thereafter issued PDRs against most of the RI shares that it held to NBM Rappler and Omidyar. The subscription price for said PDRs was P181.6 million. RHC allegedly gained close to P162.5 million from the transaction, which it failed to declare in its tax return.

On the other hand, the BIR accused accountant Baladiang of having violated Section 257 of the Tax Code for having certified the financial statements of RHC despite said corporation’s failure to disclose its purchase of RI shares.

The investigating fiscal ruled that in buying RI shares for the purpose of underwriting PDRs for resale to interested buyers, RHC acted as a middleman whose profits were taxable under the Tax Code. By not declaring such profits in its returns, the RHC has violated the Tax Code.

The DOJ ruled that Ressa, as RHC president, should be held liable for such violation because Section 253 of the Tax Code makes a corporate president, among other officers, personally liable for such infraction by the corporation.

Caparros rejected Ressa’s assertion that the non-declaration of such gain was neither intentional nor willful, holding that a defense of lack of criminal intent is better ventilated during the trial proper.

Meanwhile, the DOJ dismissed the complaint against Bitanga upon Ressa’s certification that Bitanga was an inactive and nominal treasurer who did not participate in the management and operations Of RHC.

Topics: Department of Justice , Rappler Holdings Corp. , Maria Ressa , Noel A. Baladiang , National Internal Revenue Code
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by manilastandard.net readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of manilastandard.net. While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.
AdvertisementKPPI
Advertisement