Solgen Calida asks Supreme Court to revoke ABS-CBN franchise

Kristine Joy Patag - Philstar.com
Solgen Calida asks Supreme Court to revoke ABS-CBN franchise
President Rodrigo Duterte talks with Solicitor General General Jose Calida during a post-Cabinet meeting in Malacañan’s State Dining Room on August 22, 2016

MANILA, Philippines (Update 3; 10:58 a.m.) — Solicitor General Jose Calida has asked the Supreme Court to revoke the legislative franchise of broadcast giant ABS-CBN, which has been at the receiving end of many of President Rodrigo Duterte’s tirades.

ABS-CBN reported that Calida on Monday filed a quo warranto petition against ABS-CBN Corportation and ABS-CBN Convergence Inc., a subsidiary of the network giant.

In the plea, Calida accused the broadcasting giant of “unlawfully exercising their legislative franchises under Republic Act No. 7966 and Republic Act No. 8332.”

RA 7966 pertains to the Act granting ABS-CBN Corporation franchise to operate while RA 8332 meanwhile is the Act Granting Multi-Media Telephony, Incorporated, a Franchise to Construct, Establish, Operate and Maintain Radio Paging System in the Philippines.

Multi-Media Technology, Inc. is also known as ABS-CBN Convergence, Inc. and is the network's communications arm.

Calida declined almost all questions from reporters after filing, but he said that “there is no politics” involved in the filing.

In a statement, Calida said: “We want to put an end to what we discovered to be highly abusive practices of ABS-CBN benefitting a greedy few at the expense of millions of its loyal subscribers. These practices have gone unnoticed or were disregarded for years.”

Rule 66 of the Rules of Court provides that the solicitor general can file a quo warranto (Latin for "by what authority") against “a person who usurps, intrudes into, or unlawfully holds or exercises a public office, position or franchise.”

The petition may also be filed against “an association which acts as a corporation within the Philippines without being legally incorporated or without lawful authority so to act.”

ABS-CBN’s legislative franchise will expire by the end of March but bills calling for its renewal remain pending before Congress.

House members: Encroachment on congressional power

Rep. Rufus Rodriguez (Cagayan de Oro), author of one of nearly a dozen bills to renew ABS-CBN's franchise, said in a phone patch interview on the ABS-CBN News Channel, that the move "is an encroachment on the right of Congress to grant and revoke franchises."

Rep. Johnny Pimentel (Surigao del Sur), deputy House speaker, said in a separate phone patch interview that the move is "questionable and alarming."

"It is only Congress that has the power to grant or cancel franchises," he said, adding "we have not even started hearings on the renewal."

Nonoy Espina, chairperson of the National Union of Journalists of the Philippines said the move was "more or less expected" although the timing of the filing—with the network's franchise expiring in less than two months—is "weird."

"If they can't stop Congress from acting on the bills, then the quo warranto petition is the way to go, at least to stop it," he said.

He said that said that aside from the business implications for ABS-CBN as a network, thousands of media workers could lose their jobs, adding the petition is "really a direct attack on the freedom of the press and freedom of expression."

He added: "The ball is in Congress, especially in the committee of congressional franchises. They can start the ball rolling, it's not too late."

NUJP launched last month a signature campaign to urge lawmakers to act on the renewal of ABS-CBN's franchise.

"[T]o not act on the bill is to prove that they are nothing but lapdogs of this administration," Espina said.

ABS-CBN has yet to issue an official statement on the latest development in its bid to extend its franchise.

Solgen alleges foreign ownership in ABS-CBN

A copy of the full petition has yet to be made public, but in the statement provided to media, the OSG accused ABS-CBN of allowing foreigners to invest in its ownership.

The 1987 Constitution holds that mass media ownership and management should be limited to Filipino citizens.

"Like Rappler, ABS-CBN issued Philippine Deposit Receipts through ABS-CBN Holdings Corporation to foreigners, in violation of the foreign ownership restriction on mass media in the Constitution," the statement read.

PDRs are instruments that give foreign investors a passive economic interest in a Philippine company.

Rappler, another media entity that has earned the ire of the president, faced a closure order from the Securities and Exchange Commission due to PDRs. 

The Court of Appeals sent the case back to the SEC after investor Omidyar Network later donated its PDRs to Rappler executives. The appeals court told the SEC to look into the legal effect of the donation,

'Moves without Congressional approval'

Calida also accused ABS-CBN of “abusing the privilege” given by the State when it launched pay-per-view channel in ABS-CBN TV Plus, KBO Channel without permit from the National Telecommunications Commission.

He also said that ABS-CBN Convergence “resorted to an ingenious corporate layering scheme in order to transfer its franchise without the necessary Congressional approval.”

The solicitor general said that the subsidiary did not publicly offer its outstanding capital stock to any securities exchange within five years since its operation started, “which is an indispensable condition in its franchise.”

In 2018, Calida filed a quo warranto petition against former Chief Justice Maria Lourdes Sereno that eventually led to her ouster.

Sereno, whom Duterte had branded as his enemy, was booted out of the SC after her colleagues voted 8-6 to grant Calida's quo warranto petition against her. They decided that she had never been appointed chief justice and that her appointment was invalid from the very beginning.

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