Last Monday, Albay Rep. Edcel Lagman said that the Philippine Depositary Receipts (PDRs) issued by ABS-CBN Holdings are “completely compliant” with the Constitution and are not a scheme to bypass the rules.
This clearly clarifies that PDRs do not violate the constitutional prohibition against foreign ownership of mass media since its holders lack voting and management rights.
“The Philippine Depositary Receipt of ABS-CBN which are issued of foreign investors are completely compliant with the constitution and do not constitute a scheme to circumvent the constitutional requirements on the 100% Filipino ownership.”
Corporate ownership is “not affected” by foreign investors of PDRs and the relationship between ABS-CBN Holdings and ABS-CBN Broadcasting Corp is in the public sphere, he said.
Lagman, who is one of the authors of a bill that seeks to renew the franchise of ABS-CBN, says that the issuance of PDRs is even licensed by the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE).
“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.”
This opposes the allegations of SAGIP Partylist Rep. Rodante Marcoleta who alleged ABS-CBN used the PDRs to circumvent the Constitution.
He even described it as, “a creative financial mechanism being used as a subterfuge to indirectly own the underlying ABS-CBN shares of stock.”
And even Anakalusugan Party-List Rep. Michael Defensor bolstered his argument that mass media in the Philippines must be free from foreign ownership, and ABS-CBN broke that principle.
Furthermore, ABS-CBN Corp. has always insisted that it did not violate the Constitution by selling Philippine Depositary Receipts (PDRs) to foreign companies since PDR holders can not own or manage the network.
