ABS-CBN willing to comply if use of PDRs disallowed in all of media industry —chief

Embattled broadcast giant ABS-CBN said it is willing to comply with the order of the court, the Securities and Exchange Commission (SEC), or Congress if any of them disallows the use of Philippine Depositary Receipts (PDRs) in all companies in the media industry.

ABS-CBN president and CEO Carlo Katigbak made the remark on Thursday during the continuation of the joint panel hearings of the House of Representatives on the ABS-CBN franchise issue.

In a statement, GMA Network maintained

It said it was done "in compliance with the regulations of the Securities and Exchange Commission and of the Philippine Stock Exchange."

Deputy Speaker Rodante Marcoleta, in opposing the grant of another 25-year franchise to ABS-CBN, has alleged that the broadcast company let foreign entities own its common shares through the issuance of PDRs, a violation of the constitutional provision that mass media companies in the Philippines should be 100% Filipino-owned.

Katigbak, during the hearing, maintained that they acted in "good faith" before offering PDRs to the public by seeking the approval of the SEC.

"At that time, the SEC agreed that the instrument was legal," he said.

House Minority Leader Benny Abante asked ABS-CBN if it is willing to buy back the PDRs if it is proven during the course of the congressional hearings that the issuance of these financial instruments violates the constitutional provision on the ownership of mass media.

"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," Katigbak told Abante.

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.

"If for any reason those decisions are wrong and the courts declared that they are wrong, we have in good faith relied on them. If it's going to cause some effect on the Philippine capital market dahil it will erode the investor's confidence in decisions made," she said.

"Wala kaming tinatago, we have not circumvented the Philippine Constitution, and all the terms and conditions of the PDRs have been fully disclosed and evaluated by the government agencies and the market authority," she added.  —LDF, GMA News