ABS-CBN to comply if PDRs disallowed ‘equally across media industry’

MANILA, Philippines — Media giant ABS-CBN is ready to do away with their Philippine Depositary Receipts (PDRs), if the court, Congress or the Securities and Exchange Commission would order its disqualification “equally across (the) media industry.”

ABS-CBN president and chief executive officer Carlo Katigbak said this Thursday as the House committee on legislative franchises and the committee on good government and public accountability jointly tackled issues faced by ABS-CBN—including its issuance of PDRs—in its bid for another 25-year franchise.

A PDR is a document that gives its holder, in consideration for the payment of a certain price, the right to “own” the stocks of a company and to receive their dividends or interest. In spite of that right, however, title over the stocks remains with the company.

It was House Minority Leader Bienvenido Abante Jr. who asked if ABS-CBN is willing to buy back its shares if it is proven that the issuance of PDRs is a violation of the requirement of 100 percent ownership and management of mass media companies in the country.

ABS-CBN counsel Cynthia Del Castillo said that they will comply if the Court orders them to.

Katigbak, meanwhile, explained that when they issued PDRs back in 1999, it was authorized by the SEC.

“With regards to the PDR, our sentiment is that we acted in good faith by going to the SEC to secure approval before offering it to the public. And at that time, the SEC agreed that the instrument was legal,” Katigbak said.

“But if the SEC or a court of law, or even Congress wishes to disqualify the use of PDRs equally across the entire media industry, then ABS-CBN will be willing to modify, alter, or comply with the order if so directed,” he added.

Critics claimed that ABS-CBN’s issuance of PDRs to foreign nationals violated the 100 percent Filipino ownership and management of mass media companies in the country.

This was refuted by Albay Rep. Edcel Lagman, who said that PDRs do not dilute 100 percent Filipino ownership of mass media firms, noting that PDR holders do not enjoy voting rights and full beneficial ownership.

EDV