GMA 'maintains legality' of its PDRs amid comparison with ABS-CBN
MANILA, Philippines — GMA Network Inc. on Thursday maintained the legality of Philippine Depositary Receipts that it offered to the public as lawmakers move to scrutinize the PDRs sold by other media companies in tackling the legislative franchise of embattled ABS-CBN Corp.
In a statement, GMA said the PDRs it sold were "done in compliance with the regulations of the Securities and Exchange Commission and of the Philippine Stock Exchange."
PDRs are financial instruments allowing foreigners to invest in a Filipino company without owning any part of it. Both ABS-CBN and GMA offer this type of security, although GMA leaves out this detail when reporting about its rival's franchise debacle.
On Thursday, shares in GMA fell 1.17% while ABS-CBN ended the week flat. The local stock market is closed on Friday in observance of Independence Day.
Despite earlier assurances from the National Telecommunications Commission that operations will continue, ABS-CBN was shut down last May 5, a day after the network’s legislative franchise expired. Bills seeking a new license for the network are pending at the House of Representatives dominated by political allies of President Rodrigo Duterte, who repeatedly accused the media company of bias during his presidential campaign in 2016.
Congress has been zeroing in on the PDRs issued by ABS-CBN for days, with some lawmakers accusing the media company of circumventing the law by supposedly giving foreigners the right to have control over the company through the PDRs they bought. Under the Constitution, mass media companies must be 100 percent-owned by Filipino nationals.
At Thursday's House panel hearing tackling ABS-CBN's franchise, SEC Commissioner Ephyro Luis Amatong said the wordings of PDRs offered by ABS-CBN and GMA were the same. GMA's franchise was renewed for another 25 years in 2017.
Amatong then explained that unlike the PDRs offered by news site Rappler, the ones sold by ABS-CBN do not require the company to seek the approval of PDR holders on corporate matters. Philanthropic investment company Omidyar Network has since donated its PDRs to the staff and employees of Rappler.
Amatong said that as far as the SEC is concerned, both ABS-CBN and GMA acted in good faith when they offered the PDRs to the public and that no violations were committed by the two companies.
Rep. Jose Antonio Sy-Alvarado (Bulacan, 1st District), chair of the House committee on Good Government and Public Accountability, has already directed the panel’s secretary to secure copies of PDRs “of all major broadcasting mass media in the country that will apply or otherwise applied and given franchise by this committee.”
"The Network will fully comply and submit the necessary documents as requested in the House of Representatives’ committee hearing," GMA said.
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