ABS-CBN counsel: PDRs are not shares

ABS-CBN legal counsel Atty. Cynthia del Castillo clarified the nature of Philippine Deposit Receipts (PDRs) issued by her company at the joint hearing of the House committees on Legislative Franchises and Good Government and Public Accountability earlier today. 

Del Castillo said PDR buyers are passive investors and do not have the right to own and manage ABS-CBN Corporation.

 

“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,” said Del Castillo.

(PDRs are purely financial instruments. They are not shares. [PDR holders] cannot vote on ABS-CBN Broadcasting and they cannot participate in the company’s management)

 

Del Castillo explained that ABS-CBN Corporation and ABS-CBN Holdings are two different companies and it is the latter that issues the PDRs.

 

She also argued that the Securities and Exchange Commission (SEC) approved the registration of ABS-CBN Holdings’ PDRs.

 

“Their acts are all above board. They have relied on the approvals and the permits and licenses issued by the Securities and Exchange Commission and the Philippine Stock Exchange,” she said. “Wala po kaming itinatago (we are hiding nothing). We have not circumvented the Philippine Constitution. All the terms and conditions of the PDRs have been fully disclosed and of course evaluated by the government agencies and the market authority.”

 

Del Castillo insisted that the PDR is a contract between the holder and the issuer, ABS-CBN Holdings, and such contractual arrangement has nothing to do with ABS-CBN Broadcasting. 

 

“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 added

 

ABS-CBN president and CEO Carlo Katigbak maintained that ABS-CBN Holdings acted in good faith by securing SEC approval before offering the PDRs to the public in 1999.

 

“At that time, the SEC agreed that the instrument was legal. But if the SEC or a court of law, or even Congress wishes to disqualify the use of PDRs equally across the entire media industry, then ABS-CBN will be willing to modify, alter, or comply with the order if so directed,” he said.

 

Good Government committee chair and Bulacan Rep. Jonathan Sy-Alvarado meanwhile asked other mass media entities to submit copies of their PDRs to his committee.

 

“Para sa kaalaman ng lahat dahil po ang pinag-uusapan ay PDR kahit po ABS-CBN lang po ang nag-aapply ngayon, ay nais po ng komiteng ito na makita lahat ng mga PDRs ng mga mass media, na nabigyan na, formerly nagbigyan na or mag-a-apply pa lang… Sana sa susunod na hearing ay makuha na natin upang mapag-compare natin kung pare-parehas ba ang laman ng kanilang mga PDRs,” said Sy-Alvarado.

(For everyone’s knowledge, because the topic is PDRs, even if only ABS-CBN is the one applying now, this committee seeks to see the PDRs of mass media whether recently issued, formerly issued or under application. Hopefully in the next hearing we could compare the content of the PDRs)

 

GMA7 also sold PDRs but the issue was not raised when it renewed its franchise in 2017.