Update
MANILA, Philippines — As far as the Securities and Exchange Commission (SEC) is concerned, it does not have any basis to say that media giant ABS-CBN violated its rules on the issuance and selling of Philippine Depositary Receipts (PDRs) to the public.
SEC Commissioner Ephyro Luis Amatong said this Thursday as the House committee on legislative franchises and the committee on good government and public accountability jointly tackle issues faced by ABS-CBN—including its issuance of PDRs—in its bid for a 25-year franchise.
During the hearing, Agusan del Norte 1st District Rep. Lawrence Fortun asked if it is right to say that ABS-CBN has not violated any regulation of the SEC and the 1987 Constitution concerning the issuance of PDRs.
Amatong said that it is the Supreme Court that will decide on the constitutionality of the activity.
“‘Yung Constitutional issue, yan nga po nasa Supreme Court but you are correct as far as your concern, wala kaming basehan para sabihin na nag-violate sila ng regulations namin,” Amatong said.
Amatong likewise agreed when Fortun asked if it is safe to say that ABS-CBN has been in “good faith” as far as an offering, issuing, and selling PDRs to the public is concerned.
“I would say both ASB-CBN and GMA-7,” the SEC official said.
Not all PDRs issued need to be registered with SEC
According to Amatong, only PDRs that were sold to the general public need to be registered with SEC.
“Ayon sa batas, ang kailangan register with the SEC are those securities that are offered to the general public or more than 19. Kaya ang alam namin, yung mga PDRs that were offered to more than 19,” Amatong said.
“This includes the PDRs that were offered by ABS-CBN in 1999 and 2013. Kung mayroon pa silang ibang na-issue na PDR, hindi naka-rehistro sa amin kung mayroon man,” he added.
Asked if there has been an instance where ABS-CBN offered, issued, or sold PDRs to the public without SEC’s authorization or knowledge, Amatong said they are not aware of such an event so far.
Amatong likewise said that the Philippine Stock Exchange (PSE) also has a mechanism in place to ensure that no foreigners would acquire stocks in mass media companies.
“Ang nangyayari, the PSE has a mechanism that non-Filipinos cannot acquire the shares of media companies with restricted ownership. They also have a mechanism to ensure that other partially nationalized businesses keep within the allowable requirements of the Constitution,” Amatong said.
“As far as we know, there has been no instance where the nationality restrictions for any of our companies that are engaged in fully nationalized or partially nationalized activities have been breached and this is due to the mechanisms put in place between the PSE,” he added.
One of the issues faced by ABS-CBN in its bid for a 25-year franchise was its alleged violation of the Constitution when it issued PDRs to foreign nationals.
Critics have previously said that the issuance of PDRs to foreigners is in violation of the Constitution, which requires 100 percent ownership and management of mass media companies in the country.
However, ABS-CBN has previously said that ABS-CBN Holdings’ PDRs were evaluated and approved by SEC and the PSE before its public offering.
SEC has also said that ABS-CBN does not have pending violations that don’t preclude possible investigation.
Albay 1st District Rep. Edcel Lagman has also said that PDRs do not dilute 100 percent Filipino ownership of mass media firms.
Lagman explained that PDR holders do not enjoy voting rights and full beneficial ownership thus, “they do not dilute the 100% ownership and management of mass media.”