ABS-CBN shares bleed as government moves to revoke network's franchise
MANILA, Philippines — Shares in ABS-CBN Corp. took a beating Monday morning after the Office of the Solicitor General asked the Supreme Court to revoke the media giant’s legislative franchise.
As of 10:18 a.m., ABS-CBN shares fell 2% to P16.66 each. The main index was also in the red.
ABS-CBN reported that Solicitor General Jose Calida on Monday filed a quo warranto petition against ABS-CBN Corp. 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”. He maintained that “there is no politics” involved in his moves.
“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,” Calida said in a statement.
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.”
President Rodrigo Duterte has repeatedly threatened to block the franchise extension of ABS-CBN, which he accused of bias and of not airing his paid political advertisement during the 2016 election campaign.
The media company is racing against time as its franchise will expire in March this year. A bill to extend its license for another 25 years is pending in Congress.
Analysts have warned that ABS-CBN’s franchise woes and Duterte’s recent attacks on big businesses can dampen investor confidence in the country.
The non-renewal of the franchise is also expected to severely affect the network’s business as traditional media revenues account for 70% of ABS-CBN’s revenues. — with a report from Kristine Joy Patag
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