Solicitor General Jose Calida
MANILA -- The Office of the Solicitor General on Monday filed a quo warranto petition before the Supreme Court seeking to forfeit the legislative franchises of broadcasting giant ABS-CBN Corporation and its subsidiary, ABS-CBN Convergence, Inc.
"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," Solicitor General Jose Calida said in a statement.
Calida said that ABS-CBN had been hiding behind an "elaborately crafted corporate veil", and alleged that it was allowing foreign investors to take part in the ownership of a Philippine mass media entity by issuing Philippine Deposit Receipts (PDRs) through ABS-CBN Holdings Corp., a violation of the 1987 Constitution.
Under the 1987 Constitution, mass media ownership is limited to Filipinos.
"This simply means that mass media companies operating in the Philippines must be 100 percent Filipino owned because they play an integral role in the nation's economic, political, and socio-political landscape," Calida said.
Calida added that the broadcasting firm "abused" the privilege granted by the State when it launched and operated a pay-per-view channel in ABS-CBN TV Plus, the KBO Channel, without prior approval or permit from the National Telecommunications Commission (NTC).
"While it is true that broadcasting is a business, the welfare of the people must not be sacrificed in the pursuit of profit," Calida said.
Calida said ABS-CBN Convergence, Inc. resorted to an "ingenious corporate layering scheme" in order to transfer its franchise without the necessary congressional approval.
"The legislative franchises of ABS-CBN Corporation and its subsidiary, ABS-CBN Convergence, Inc. must be revoked. A franchise is a special privilege granted by the State, and should be restricted only to entities which faithfully adhere to our Constitution," he said.
At least eleven lawmakers filed proposals to take up whether the Lopez-controlled firm's congressional franchise should be granted when its original franchise expires next month.
Under the law, the grantees of a broadcasting franchise must secure from the government, through the NTC, the required permits and licenses for their operation.
In a statement, the ABS-CBN belied the solicitor general's allegations, saying those were "without merit".
"ABS-CBN complies with all pertinent laws governing its franchise and has secured all necessary government and regulatory approvals for its business operations," the statement read.
It said the PDRs were "evaluated and approved" by the Securities and Exchange Commission and the Philippine Stock Exchange prior to its public offering.
"We reiterate that everything we do is in accordance with the law. We did not violate the law," it said. (PNA)
