MANILA, Philippines — The Office of the Solicitor General said it will study filing an appeal to overturn the Supreme Court’s dismissal of its quo warranto petition against ABS-CBN’s legislative franchise.
The SC, in an en banc session on June 23, junked Solicitor General Jose Calida’s quo warranto petition against ABS-CBN Corp.’s now-expired franchise for being moot.
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The OSG said it has yet to receive a copy of the SC ruling, but it added: “Once a copy of the decision has been obtained, the OSG will study the filing of a motion for reconsideration, in necessary given the constitutional issue on foreign ownership raised in the OSG petition,” it said in a statement.
Foreign ownership issues
One of the grounds Calida raised in his quo warranto petition is that ABS-CBN Corp. violated its franchise law by allowing foreign ownership of the company, through the use of the Philippine Depositary Receipts.
Section 11, Article XVI of the Constitution provides: “The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.”
PDRs, meanwhile, are financial instruments that give foreign investors a passive economic interest in a Philippine company.
ABS-CBN’s PDRs is also one of the issues being discussed at the House of Representatives’ hearing into franchise bills.
Both ABS-CBN and GMA, another media giant in the country, offer this type of security.
The network’s representatives insisted the PDRs were issued by ABS-CBN Holdings, which is a different company from ABS-CBN Corp. In its comment filed before the SC, the media giant explained that “PDR holders’ rights are not equivalent to the full beneficial ownership rights of the shareholders of ABS-CBN.”
READ: Point by point: ABS-CBN answers Solgen Calida's quo warranto petition
In a hearing last June 11, Securities and Exchange Commissioner Ephyro Amatong said, as quoted in a CNN Philippines report, there was the “prevailing opinion” that when ABS-CBN Holding issued PDRs in 1999 and 2013, that these “were not evidence of ownership.”
Amatong had also said that as far as the SEC is concerned, both ABS-CBN and GMA acted in good faith when they offered PDRs to the public and that no violations were committed by the two companies.
Quo warranto vs ABS-CBN’s Convergence still pending
Calida also noted that his quo warranto petition against ABS’CBN subsidiary, Convergence Inc., remains pending before the SC.
“Notably, the [SC] did not delve on the issues in the case of ABS-CBN Convergence Inc.,” the statement read.
The company, however, issued a disclosure at the Philippine Stock Exchange saying that Convergence’s legislative franchise expired on March 17.
ABS-CBN’s petition for certiorari against the National Telecommunications Commission’s Cease and Desist Order issued May 5 also remains pending before the tribunal. — with reports from Ian Nicolas Cigaral