ABS-CBN did not circumvent Constitution in issuing PDRs to foreign entities —counsel

The counsel for embattled media company ABS-CBN on Thursday maintained that the network did not circumvent the Philippine Constitution when ABS-CBN Holdings Corp. issued Philippine Depositary Receipts (PDRs) to foreign entities.

During the continuation of the House joint panel hearing on the ABS-CBN franchise issue, Atty. Cynthia Del Castillo, counsel for the network, maintained that PDRs are merely financial instruments, not shares, and that holders have no right to vote and to participate in the management of ABS-CBN Broadcasting Corp.

Deputy Speaker Rodante Marcoleta, in opposing the grant of another 25-year franchise to ABS-CBN, alleged that the network let foreign entities own its common shares through the issuance of PDRs, a violation of the constitutional provision that mass media companies in the Philippines should be 100% Filipino-owned.

Del Castillo pointed out that the PDRs were issued by ABS-CBN Holdings, not ABS-CBN Broadcasting Corp., which is the one involved in mass media.

"This contractual arrangement has nothing to do with ABS-CBN Broadcasting. Because ang parties nito ay ang investors at ang ABS-CBN Holdings. Hindi party sa PDR instrument ang ABS-CBN Broadcasting," she said.

"Ang rights ng PDR holders are only against ABS-CBN Holdings, hindi against ABS-CBN Broadcasting, at wala silang rights whether of ownership or management of a mass media company which is the ABS-CBN Broadcasting Corp," she added.

Del Castillo likewise maintained the acts of ABS-CBN related to the PDRs were "all above board," relying on the approvals and the permits and licenses issued by the Securities and Exchange Commission and the Philippine Stock Exchange.

"If for any reason those decisions are wrong and the courts declared that they are wrong, we have in good faith relied on them. If it's going to cause some effect on the Philippine capital market dahil it will erode the investor's confidence in decisions made," she said.

"Wala kaming tinatago, we have not circumvented the Philippine Constitution, and all the terms and conditions of the PDRs have been fully disclosed and evaluated by the government agencies and the market authority," she added.

However, in a counter-presentation, Anakalusugan party-list Representative Mike Defensor, insisted that each PDR has an actual share in ABS-CBN Broadcasting Corp.

"Ang ABS-CBN maraming layers ng pagmamay-ari. Hindi lang ang ABS-CBN Corp., ang nagmamay-ari ay ABS-CBN Holdings. Nandiyan ang PDRs sa ABS-CBN Holdings," he said.

"May Lopez Inc., may ABS-CBN, may ABS-CBN Holdings, at merong Lopez Holdings. Sa dalawang korporasyon ng ABS-CBN Holdings and Lopez Holdings, merong mga banyaga na nagmamay-ari ng PDRs. At ang PDRs na yan ay may katumbas na share sa ABS-CBN," he added.

Defensor read an excerpt from the shareholders meeting from ABS-CBN Holdings Corp., which said that "the PDRs unlock the shared value of ABS-CBN, allowing foreigners to participate in a media enterprise whose ownership is constitutionally limited to Filipinos, with foreigners allowed to buy PDR shares which have been long undervalued can now play catch up with the regional media counterparts."

"They may not have their names, wala sa pangalan nila yung ABS-CBN Corp. share pero ang bawat PDR ay may katumbas na share sa ABS-CBN Corp.," Defensor said.

For Defensor, this is a circumvention of the constitutional provision on media ownership.

"Sa maraming pagkakataon, 'yan ay pwedeng nating sabihin na anti-dummy, na merong banyaga, meron siyang kinabitan na korporasyon na Pilipino, pero ang kita, ang pagmamay-ari, sa katotohanan ay kanya," he added.

Following the presentation of Defensor, House good government panel chair Jonathan Sy-Alvarado directed the committee secretariat to ask all broadcasting companies in the country who have acquired or will apply for franchise to submit copies of their PDRs to the committee to compare their contents.

The joint House panels began hearing the bills granting another 25-year franchise to ABS-CBN after the leadership decided to drop the measure that would supposedly give the network a provisional franchise until October 31, 2020.

Speaker Alan Peter Cayetano, himself an author of the provisional franchise bill, has said the issue on the ABS-CBN franchise has already become "so divisive" and is taking up the time even as there are more pressing matters to discuss such as that of COVID-19 response measures.

He, however, vowed to have a fair and comprehensive hearings on the issue on the committee level. —LDF, GMA News

--