One of the authors of the bill seeking the renewal of the franchise to operate the shuttered ABS-CBN defended the network’s issuance of Philippine Depositary Receipts by media networks, which he said was also being done by local media entities.
Albay Rep. Edcel Lagman says the issuance of PDRs by media networks like ABS-CBN Corp. does not violate the constitutional requirement of a hundred percent Filipino ownership and management of mass media.
He made his statement even as no immediate relief appeared for ABS-CBN in its petition to invalidate the National Telecommunications Commission ordering it to close. This was after the Supreme Court scheduled next month its deliberation on the network’s petition.
Chief Justice Diosdado Peralta said ABS-CBN’s petition against the NTC would be deliberated on July 13.
“It is scheduled for another discussion on July 13,” Chief Justice Peralta said in his first virtual “CJ Meets the Press” on Thursday.
Peralta said they needed time to read through the comments submitted by the Senate and the House of Representatives on the network’s petition before deliberating on it.
Lagman made his statement as the House committees on legislative franchises and good government and public accountability, led by Reps. Franz Alvarez of Palawan and Jonathan Sy-Alvarado, respectively, resumed their hearings on the pending bills on the renewal of ABS-CBN’s franchise.
The issuance of PDRs is one of the issues raised against the bills by those against the renewal of the network’s franchise.
“PDRs are not vested with voting rights and full beneficial ownership to which shares of stock are entitled,” Lagman said.
He says since PDRs do not enjoy voting rights and full beneficial ownership, they do not dilute the hundred-percent ownership and management of mass media.
“PDR holders are only entitled to receive dividends accruing to the underlying shares after operating costs and other expenses are deducted from the profits, and the option to convert the underlying shares to shares of stock if qualified as a Filipino,” Lagman said.
He says the issuer of the PDRs retains the voting rights since PDRs are mere instruments of investment and not evidence of corporate ownership.
The issuer of the PDRs is ABS-CBN Holdings Corporation, to which ABS-CBN Corporation’s shares were assigned, and over which it constituted the PDRs.
Lagman said ABS-CBN Holdings Corp. secured beforehand the authority to offer PDRs as securities with permission from the Securities and Exchange Commission on Oct. 4, 1999, and on Jan. 7, 2014.