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Former head of Philippine Stock Exchange clarifies PDRs are not shares of stock

“It’s not the PDR holders that own shares that ABS-CBN Corporation, it’s the ABS-CBN Holdings that owns shares, or it’s a shareholder in ABS-CBN Corporation. GMA has PDRs, a foreigner can hold a PDR without violating any constitution restrictions.”

After Solicitor General Jose Calida’s quo warranto petition to revoke ABS-CBN’s existing franchise immediately based on the company allegedly being partly owned by foreigners, the former head of the Philippine Stock Exchange, Atty. Francis Lim, clarified the difference between a Philippine Depositary Receipt (PDR) holder and a shareholder.

“The PDR holder is neither stockholder of the ABS-CBN Corporation of a stockholder of ABS-CBN holdings, it’s not ownership, and PDR holder does not have the right to vote. If you are a foreigner, you cannot convert it into a share of example of ABS-CBN Corporation because you are disqualified from owning shares in ABS-CBN Corporation.”

To explain further on how PDRs really work, Lim used an example of taking a chance in a racehorse, by betting a specific amount for it, and you will get a part of share when the horse wins in the race, and it doesn’t necessarily mean that you are the owner of the horse.

“It’s like a buying a ticket in order to bet on a horse, you don’t own the horse. If that horse wins, you have the share in the winning.”

Moreover, he reiterated that aside from ABS-CBN, other media companies, and entities also utilize PDRs.

“It’s not the PDR holders that own shares that ABS-CBN Corporation, it’s the ABS-CBN Holdings that owns shares, or it’s a shareholder in ABS-CBN Corporation. GMA has PDRs, a foreigner can hold a PDR without violating any constitution restrictions.”

In layman’s terms, PDRs are a financial instrument commonly used by media entities to allow or accept foreign investments without violating the constitutional rule, which states that media companies should be 100% Filipino-owned. A PDR is one of the great ways to increase the capital of media companies, without offering a part of its shares to PDR holders. These PDR  holders are not eligible to have ownership of the network, they can only receive a part of revenue.



ABS-CBN’s PDRs are allowed by the Securities and Exchange Commission (SEC) since there is no ownership attributed to its PDRs. In this case, SolGen Jose Calida needs to be fully informed how PDRs since he submitted a quo warranto petition.

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