‘PDRs issued by ABS-CBN, GMA the same’

MANILA, Philippines — The chair of the House committee on good government and public accountability on Monday acknowledged there’s no difference between the Philippine depositary receipts (PDRs) issued by ABS-CBN and its chief rival GMA except for the price.

Lawmakers opposing the grant of a new franchise to ABS-CBN spent the sixth hearing of the joint panel on legislative franchises and good government accusing the media network of skirting the constitutional ban on foreign ownership of mass media by issuing PDRs to foreigners.

But Bulacan Rep. Jose Antonio Sy-Alvarado, who presided over the inquiry along with the franchises panel chair, Palawan Rep. Franz Alvarez, said the wording of ABS-CBN’s PDRs was the same as in those issued by GMA, whose own PDRs were not questioned when its franchise was renewed in April 2017.

Replying to a question of Nueva Ecija Rep. Micaela Violago, one of the authors of the ABS-CBN renewal bills, Sy-Alvarado said only GMA, which uses Channel 7, had submitted its PDRs to the joint panel.

“So far only Channel 7 has submitted theirs. I read their PDRs, and the only difference I saw [with ABS-CBN’s] was the price,” he said in Filipino.

ABS-CBN’s lawyers and executives had argued that issuing PDRs did not circumvent provisions in the 1987 Constitution prohibiting foreigners from owning or managing mass media companies.

PDRs are investment tools that grant holders the right to the delivery or sale of the underlying share, but it is neither proof nor certificate of ownership of a corporation, according to the Philippine Stock Exchange.

But Deputy Speaker Rodante Marcoleta and Cavite Rep. Elpidio Barzaga Jr. repeatedly argued during Monday’s hearing that ABS-CBN circumvented the law.

Marcoleta said the panel should strive to “pierce the veil of corporate fiction” in how ABS-CBN Corp. and its mother and sister companies set up the PDRs.

He said the PDRs issued by ABS-CBN were only “circulating” between and among ABS-CBN Holdings, ABS-CBN Corp., Lopez Inc. and Lopez Holdings Inc. to perpetuate fraud.

But ABS-CBN’s legal counsel Cynthia del Castillo said ABS-CBN Holdings “wasn’t organized to perpetuate fraud,” and denied that it was an alter ego of ABS-CBN Corp.

In a previous hearing, ABS-CBN president and CEO Carlo Katigbak said PDRs “do not result in foreign ownership of ABS-CBN. A PDR is not a share in ABS-CBN.”

He noted that PDR holders, whether foreign or local, “cannot vote on any ABS-CBN matter because they do not hold shares in ABS-CBN.”

Katigbak added that the Securities and Exchange Commission approved the network’s issuance of PDRs on Oct. 4, 1999. “How can this be against the law if a government agency gave the permit?” he said.