By Ben Rosario
The Securities and Exchange Commission (SEC) has no complaints about ABS-CBN’s issuance of Philippine Depositary Receipts (PDRs) and compliance with SEC regulations, but the network giant’s observance of the strict nationalist constitutional provisions on media ownership remain suspect.
Deputy Speaker and Sagip Partylist Rep. Rodante Marcoleta made this clear in the joint congressional hearing for the legislative franchise application of the network conducted on the eve of Independence Day.
In the same hearing, Anakalusugan Partylist Rep. Michael Defensor reminded congressional colleagues that they have the power to regulate media ownership by prohibiting dual citizens from owning any shares in any media company.
Defensor’s statement was clearly aimed towards ABS-CBN chairman emeritus Eugenio “Gabby” Lopez III, who holds dual citizenship — as an American for being born in Massachusetts, and a Filipino for having parents who are citizens of the Philippines.
Defensor, chairman of the House committee on public accounts, said the comprehensive House hearings on the proposed fresh grant of a 25-year franchise to ABS-CBN Broadcasting Corp. “have shown that allowing a Filipino who is at the same time a citizen of another country is inimical to national security and the nation’s interest.”
The joint hearing conducted by the House committees on legislative
franchises and on good government moved Thursday from questions raised on Lopez’s citizenship to the Kapamilya network’s issuance of PDRs to non-Filipinos.
In the hearing, lawyer Cynthia del Castillo, representing ABS-CBN Holdings that issued the PDRs, said holders of the instrument were merely “passive investors” and are neither allowed to own nor take part in the management of the network.
“PDRs are purely financial instruments. Hindi po ito shares. Hindi po sila nakakaboto sa ABS-CBN Broadcasting at hindi po sila nakakapag-participate sa management ng ABS-CBN (These are not shares. They can’t vote in ABSS-CBN Broadcasting and they can’t participate in the management of ABS-CBN),” said del Castillo, former dean of the Ateneo de Manila University School of Law.
The network’s lawyer also said the SEC had approved the registration of ABS-CBN Holding’s PDRs, thus indicating it had been subjected to the “full scrutiny, review, and regulation of the SEC” and even the Philippine Stock Exchange.
Stressing that everything was “above board,” Del Castillo also pointed out that there was no violation of the Constitution on media ownership because the PDR transactions, including those entered into with foreigners and foreign companies, were between the holders and ABS-CBN Holdings, and not the ABS-CBN Corporation that owns the network.
“The PDRs have a life of [their] own. They are not attached to the shares of ABS-CBN Broadcasting. They trade independently, and their financial and cash distributions are separately given by ABS-CBN Holdings,” she said.
However, Marcoleta slammed ABS-CBN’s contention.
With the reputation of being ABS-CBN’s staunchest oppositor, Marcoleta said the SEC’s role in looking into the legality of ABS-CBN’s PDR endeavor was restricted to the determination that the network satisfactorily complied with the regulatory agency’s rules.
“Ang SEC ay hindi isang korte na sasabihin niya na ito ay makalalabag sa Saligang Batas. Ang inaprub po ay pagbebenta ninyo ng PDR (The SEC is not a court that will state that the Constitution is being violated. What was approved was the sale of PDRs),” he stated in a 15-minute interpellation of network officials.
Cavite Rep. Crispin Remulla backed Defensor’s argument that the constitutional mandate on 100 percent Filipino ownership of a media entity is opposed to the dual allegiance of managers of the firm.
To drive home his point against dual allegiance and dual citizens as media owners, Remulla reminded his colleagues that during the Philippine-American war, the Americans “killed 20 percent of our population.”
For his part, Dasmariñas City Rep. Elpidio Barzaga Jr. cited debates on the issues of dual citizenship and dual allegiance in the 1986 constitutional commission that drafted the present Constitution.
Barzaga said the commission held the view that to resolve the question of dual allegiance, a dual citizen has to decide which of his two citizenships he would retain for good.