MANILA - The Philippine Deposit Receipt (PDRs) issued by ABS-CBN Holdings are "completely compliant" with the Constitution and are not a scheme to circumvent the laws, Albay Rep. Edcel Lagman said Monday.
The PDRs do not violate the constitutional prohibition against foreign ownership of mass media since its holders lack voting and management rights, Lagman said. Criticism against it are "regrettable utterly baseless speculations," he said.
Corporate ownership is "not affected" by foreign investors of PDRs and that the relationship between ABS-CBN Holdings and ABS-CBN Broadcasting Corp is in the public sphere, he said.
The issuance of PDRs is approved by the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE), said Lagman, author of one of several bills seeking to renew ABS-CBN Corp's franchise.
SAGIP Party-list Rep. Rodante Marcoleta earlier alleged that ABS-CBN used the PDRs to circumvent the Constitution.
"There is nothing illegal or irregular about this," Lagman said.
"No avalanche of adverse comments and speculative innuendos will alter the operative fact that PDRs are divested with voting rights, ownership entitlements or management prerogatives and cannot be converted to shares of stock in favor of alien PDR holders," he said.
It is also "not surprising" for foreigners to invest in PDRs since the financial instrument was introduced to raise funds after the Asian financial crisis when the usual sources were unavailable, Lagman said.
PDR holders are not stockholders. The issuance of PDRs is also not an "innovation" of ABS-CBN since it has been a practice in the United States for over 100 years, he said.
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