GMA-7, ABS-CBN acted in ‘good faith’ in issuing PDRs —SEC official

An official of the Securities and Exchange Commission (SEC) on Thursday agreed that ABS-CBN, and even GMA-7, acted in "good faith" when they offered and sold Philippine Depositary Receipts (PDRs) to the public.

SEC Commissioner Ephyro Luis Amatong made the remark during the continuation of the joint panel hearing of the House of Representatives on the ABS-CBN franchise issue.

During the hearing, Agusan Del Norte Representative Lawrence Fortun asked Amatong if it was right to say that ABS-CBN has not violated any regulation of the SEC and the Constitution when it comes to the issuance of PDRs.

Amatong said the SEC has no basis to say that ABS-CBN violated its regulations regarding the matter.

"Yung constitutional issue, yan nga po [ay] nasa Supreme Court. But you are correct, as far as your concern, wala kaming basehan para sabihin na nag-violate sila ng regulations namin. That’s why we are awaiting the ruling of the Supreme Court," he said.

If this was the case, Fortun asked Amatong if ABS-CBN has acted in good faith when it comes to the issuance of the PDRs.

"I would say both ASB-CBN and GMA-7, both of them [were in good faith]," Amatong told Fortun.

Amatong confirmed during the hearing that GMA-7 also offered and issued PDRs to the public.

He said that based on the documents submitted by GMA-7 to them, the Kapuso network's PDRs have similarities with that of ABS-CBN.

"Base doon sa dokumento na sinubmit sa amin ng GMA-7 ay halos word for word na kapareha yung features ng PDR ng GMA-7 sa ABS-CBN," Amatong said.

Amatong, however, said that they have not received any report where foreign holders of PDRs issued by any media company in the Philippines were able to convert them into common shares.

Atty. Cynthia Del Castillo, counsel for ABS-CBN, maintained that the network did not circumvent the Philippine Constitution when ABS-CBN Holdings Corp. issued PDRs to foreign entities.

PDRs, she said, are merely financial instruments, not shares, and that holders have no rights to vote and to participate in the management of ABS-CBN Broadcasting Corp.

Del Castillo also 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.

House good government panel chair Jonathan Sy-Alvarado has 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. —LDF, GMA News