Rappler CEO Maria Ressa under mounting pressure to explain sustained multi-million peso losses! 😱

There are two entities registered with the SEC; Rappler Holdings and Rappler Inc. The first company is a funding conduit acting as an investor in the subsidiary. The second company is the one which operates the news site and employs Ressa and her Rapplerettes.

The question which Ressa should answer is where do they get the continued "investment" while Rappler continues to operate at a loss since its inception. Note that the parent and the subsidiary company both share a common set of stockholders.

The next question Ressa should answer is can each of the stockholders justify their financial wherewithal to be able to sustain Rappler's continued operation? The last capital infusion amounted to P120M.

Finally, there is the generally accepted accounting principle of a going concern. Losses incurred over time, since incorporation, would cast doubts on a firm's solvency. It is for this reason, that the SEC requires all registered corporations to submit their General Information Sheets and Audited Financial Statements every April after they have filed their Corporate Income Tax Return with the BIR.

How can Rappler's external auditor continue to justify its viability as a going concern if it continues to incur heavy losses? Rappler didn't address this issue when it published a rejoinder to Mr. Nieto yesterday. Of course, they can always recapitalize by increasing the parent and the subsidiary company's authorized capital stock. But eventually, the SEC will have no choice but to call the attention of Rappler to such moves, given the firm continues to lose money. This is the $64 question which Maria Ressa should answer.


---------------------
RG San Luis as posted on Facebook.