MANILA—ABS-CBN Corp on Monday said the petition to revoke its legislative franchise was “ill-timed” and insisted that it did not violate the constitutional ban on foreign ownership.
“We did not violate the law. This case appears to be an attempt to deprive Filipinos of the services of ABS-CBN,” the company said in a statement.
Solicitor General Jose Calida’s quo warranto petition alleged that the company had issued Philippine Depositary Receipts (PDRs) to foreigners, the same issue raised against news website Rappler.
These financial instruments allow holders the right to “own” a company’s stocks, but the company retains title over them, and subject to the rules on foreign ownership restrictions.
PDRs issued by ABS-CBN Holdings were “evaluated and approved” by the Securities and Exchange Commission and the Philippine Stock Exchange prior public offering, ABS-CBN said in a statement, noting other broadcast companies used them “to raise capital for the improvement of services.”
The Calida petition also claimed that ABS-CBN Corp “abused” its franchise privilege by operating a pay-per-view channel without approval from the National Telecommunications Commission.
ABS-CBN said: “All our broadcast offerings, including KBO, have received the necessary government and regulatory approvals and are not prohibited by our franchise.”
Calida also sought to revoke the franchise of ABS-CBN subsidiary, ABS-CBN Convergence Inc over an “ingenious corporate layering scheme in order to transfer its franchise” without approval from Congress.
ABS-CBN’s ownership in ABS-CBN Convergence, the company said, was “undertaken under the same law and structures that have been utilized by other telecommunications companies.”
The ownership transfer was approved under the Public Telecommunications Policy Act and “fully compliant with law,” it said.
“KBO remains one of the cheapest forms of entertainment that we can provide to the public,” ABS-CBN said.
“The capital we have raised from the PDRs has enabled us to provide services to nearly 90 percent of the Philippines and to our OFW’s all over the world.”
Calida’s petition came despite 11 pending bills seeking an extension of ABS-CBN’s franchise, which will expire on March 30.
The company said the case was “ill-timed given that Congress has already resumed its session.”
News.abs-cbn.com is the official news website of ABS-CBN Corp.