(Editor's Note: An earlier version of the article stated that the Class License comes with requirements, such as removing content in breach of standards and posting a performance bond of S$50,000. This refers to the Online News Licensing Scheme, which TOC is not under. The article has since been amended.)

Terry Xu, chief editor of The Online Citizen (TOC), dropped a bombshell in the early hours of Tuesday (Sep. 7) on the potential future of his website.

He claimed that the Infocomm Media Development Authority (IMDA) issued a notice that it "will suspend" the Class License of The Online Citizen Pte Ltd.

The reason? It has not made its required annual declaration under the Broadcasting (Class Licence) Notification.

However, IMDA issued a news release that said it has merely asked TOC to explain its non-compliance with the rule.

What is the annual declaration?

Registered websites must also undertake not to receive funding from foreign sources for the provision, management and/ or operation of the website, except for bona fide commercial purposes.

TOC registered in 2018 so as not to lose its class license.

In December that same year, TOC shared that its contributions have to be from "verified local sources", if they are meant for the website.

Otherwise, the donations need to be returned or donated to charity.

What's going on now?

In a news release on Sep. 7, IMDA said:

"TOC has repeatedly failed to declare all its funding sources for its 2020 annual declaration despite multiple reminders and extensions granted to TOC. TOC has informed IMDA that it does not intend to comply with its obligations under the law. IMDA has therefore asked TOC to explain its non-compliance."

IMDA said there is no reason for TOC not to comply, as other registered websites do so to be transparent about their sources of funding.

While TOC complied in 2018, IMDA said it has not done so since 2019, adding, "TOC failed to verify a donor and to clarify discrepancies in its foreign advertising revenue in its 2019 declaration, for which IMDA had issued a Warning on 4 May 2021."

IMDA has asked TOC to explain its non-compliance. If it is unable to provide good reasons, IMDA may take further action.

Contrary to Xu's Facebook post, IMDA has not yet said that it will definitely suspend TOC's licence.

Why is transparency important?

According to IMDA, websites that promote or discuss political issues relating to Singapore must be transparent about their funding, to prevent them from being controlled or influenced by foreigners.

This is to prevent foreign influence in local politics.

IMDA cited the 1970s cases of The Eastern Sun and the Singapore Herald as examples of foreign meddling in local politics, and said that the prevalence of the Internet and social media platforms makes it easier to influence a large number of people.

In 2019, Home Affairs and Law Minister K Shanmugam questioned the motivations of foreign writers working for TOC.

One such writer, Kiara Xavier/Rubaashini Shunmuganathan wrote the defamatory article which led to Prime Minister Lee Hsien Loong filing suit.

What did Terry Xu say?

In his Facebook post, Xu explained that with regards to the donor, TOC does not have his ID number and will donate to charity if required.

He also said that its failure to clarify discrepancies in its foreign advertising revenue is a "simple advertising mistake".

Xu also added:

"The key reason for TOC not filling up the declaration is because of IMDA's unjustified attempt to scrutinise how TOC conducts its business. TOC had offered to fill in the declaration if the subscription portion could be exempted from the declaration, IMDA rejected that proposal.

Can you imagine IMDA writing to Straits Times and SPH's other papers asking why they are charging their subscribers for so much when it is full of propaganda from the government?

This ridiculous action by IMDA was not featured in its latest letter."

Xu is also involved in fundraising efforts after Prime Minister Lee Hsien Loong was awarded S$210,000 in damages over the defamatory article published on TOC.