MANILA – Anakalusugan Party-list Rep. Mike Defensor on Thursday said the value of a Philippine Depositary Receipt (PDR) is equal to the value of one share in ABS-CBN Corporation, which violates nationality rules on ownership of mass media companies.
During the House hearing on ABS-CBN’s franchise issue, Defensor said the PDRs have been used as a circumvention of the constitutional requirement that mass media companies should be 100 percent owned and managed by Filipinos.
Defensor said the PDR represents a share in a company that gives the owner the right to all the dividends due and shares of stock acquired.
“Ang PDRs po ay pagtatago sa tunay na pagmamay-ari ng dayuhan (The PDRs are used to conceal the true ownership of foreigners),” Defensor said.
“There is an actual share in ABS-CBN Corp. They may not have their names. Wala sa pangalan nila yung ABS-CBN Corp. share, pero ang bawat PDR ay may katumbas na share sa ABS-CBN Corp. (The ABS-CBN Corp. share may not be under their names, but each PDR is equivalent to a share in ABS-CBN Corp.),” he added.
He said the ABS-CBN Corp. has multiple layers of ownership that includes the Lopez Holdings, which he noted has 9.89 percent of its shares owned by a non-Filipino PCD Nominee Corp.
He said the ABS-CBN Holdings, which owns shares of stock of ABS-CBN Corp., sold PDRs to foreign investors.
Defensor cited a quoted from a shareholder meeting of the ABS-CBN Holdings, saying that the “PDRs unlock the share value of ABS-CBN allowing foreigners to participate in a media enterprise whose ownership is constitutionally-limited to Filipinos, with foreigners allowed to buy PDRs, shares”.
He noted that the Constitution is “very clear” that there should be no foreign ownership and control of mass media companies.
“Kahit isang patak, kahit isang butil lang na pagmamay-ari hindi pupuwede. Kahit ano pong layering ng korporasyon, ‘pag may lumabas na isang banyaga at pumasok yan sa ABS-CBN Corp. hindi ho pinapayagan (Even just a drop, or a grain of [foreign] ownership is not allowed. Even underneath the layering of a corporation, if a foreigner ends up owning ABS-CBN Corp., that should not be allowed),” he added.
ABS-CBN’s legal counsel Cynthia Del Castillo said ABS-CBN Holdings is a purely holdings company incorporated to invest in shares, while ABS-CBN Broadcasting Corp. is a firm that is engaged in mass media.
Castillo said the PDRs were issued by ABS-CBN Holdings to investors under the terms of the PDR instrument, stressing that the contractual arrangement has nothing to do with ABS-CBN Broadcasting.
“Ang parties nito ay ang investors at ang ABS-CBN Holdings. Hindi party sa PDR instrument ang ABS-CBN Broadcasting (The parties involved here are the investors and ABS-CBN Holdings. ABS-CBN Broadcasting is not part of the party of the PDR instrument),” she said.
She stressed that PDRs are only financial instruments, not shares, which means that the PDR owners cannot participate in the management of ABS-CBN Broadcasting.
“Ang only expectation ng investors (The only expectation of investors of) PDRs would be of course whatever cash distribution and gains they can derive in the trading and transfer of ownership of the PDRs. As far as the issuance of PDRs is concerned, the PDR instrument does not transfer any voting rights, especially the right to vote directors,” she said.
“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. Filane Mikee Cervantes /PNA – northboundasia.com