Solicitor General questions ABS-CBN franchise before Supreme Court

Christian V. Esguerra and Mike Navallo, ABS-CBN News

Posted at Feb 10 2020 09:34 AM | Updated as of Feb 11 2020 08:58 AM

MANILA — (UPDATE) Solicitor General Jose Calida on Monday asked the Supreme Court to revoke the franchise of ABS-CBN Corp and its subsidiary, ABS-CBN Convergence Inc, in yet another move to crack down on the news network, which has been repeatedly criticized by President Rodrigo Duterte.

Solicitor General Jose Calida cited supposed "abuses" in ABS-CBN’s franchise which will expire in March. The House of Representatives has yet to hear several bills seeking to renew the company's license to operate.

Calida filed a quo warranto petition, the same mode he utilized to remove a known Duterte critic, former Chief Justice Maria Lourdes Sereno, in May 2018.

A "quo warranto" is a legal procedure that is filed against someone who "usurps, intrudes into, or unlawfully holds or exercises a public office, position or franchise," according to Rule 66 of the Rules of Civil Procedure.

"We want to put an end to what we discovered to be highly abusive practices of ABS-CBN benefiting a greedy few at the expense of millions of its loyal subscribers," Calida said in a statement.

"These practices have gone unnoticed or were disregarded for years."

Calida alleged that ABS-CBN used an "elaborately crafted corporate veil" to supposedly allow foreign investors to take part in its ownership.

Supposed violation of the constitutional ban against foreign ownership in mass media was also used earlier to go after news website Rappler.

Like Rappler, ABS-CBN allegedly violated the ownership restriction when it issued Philippine Depositary Receipts to foreigners. A depositary receipt gives its holder some benefits without giving stockholder status.

ABS-CBN also went “beyond the scope of its legislative franchise” for “broadcasting for a fee,” Calida said.

ABS-CBN Corp earlier said it secured clearance from the Securities and Exchange Commission to issue PDRs. Shares of ABS-CBN were down 0.26 percent to P16.74 in early trading after the Supreme Court filing.

In the case of ABS-CBN Convergence Inc., it allegedly “resorted to an ingenious corporate layering scheme in order to transfer its franchise” without approval from Congress.

The subsidiary supposedly violated its franchise that required it publicly offer its outstanding capital stock to any securities exchange in the country within 5 years.

The Solicitor General sought to scrap the franchise even before Congress could decide on whether to extend it for another 25 years. At least 11 bills have been filed in support of ABS-CBN’s bid to renew its franchise.

Duterte had repeatedly accused ABS-CBN of refusing to air his campaign ad during the 2016 elections.

Several rights monitors like Reporters Without Borders and FORUM-Asia earlier urged Philippine lawmakers to renew ABS-CBN's franchise and stand for press freedom. is the official news website of ABS-CBN Corp.