MANILA, Philippines – Finance Secretary Carlos Dominguez III sees a boost in investor confidence should the alleged violations of embattled media giant ABS-CBN be proven true.
“There’s a claim by the OSG (Office of the Solicitor General) that there is a violation of the regulations. In fact, it might be a constitutional violation. I think that if that’s proven, the investors will say, ‘These guys (the government) are upholding the rule of law,'” Dominguez said on Tuesday, February 18, on the sidelines of an event of the Bureau of Internal Revenue.
Solicitor General Jose Calida filed a quo warranto petition against ABS-CBN, insisting that the network violated foreign ownership restrictions by issuing Philippine Depositary Receipts – a financial instrument that allows foreigners to invest in a Philippine media entity, but does not grant ownership of shares or control. (READ: EXPLAINER: Is Calida’s ABS-CBN PDR theory bad for business?)
The Philippine Constitution does not allow foreigners to own shares of any Philippine media company.
Calida also claimed that the network violated its franchise terms by selling ABS-CBN TV Plus, under which subscribers can pay another fee to watch movies on the Kapamilya Box Office channel. He said ABS-CBN did not secure permits from the National Telecommunications Commission. (READ: EXPLAINER: Legal points in Calida’s quo warranto vs ABS-CBN)
Moreover, the government’s top lawyer said the network resorted to an “ingenious corporate layering scheme” to transfer its franchise without congressional approval. (READ: ABS-CBN case: Testing the limits of corporate structuring practices)
Legal and business experts already pointed out that the attacks on ABS-CBN, amid the review of water contracts and President Rodrigo Duterte cursing some of the country’s richest businessmen, have negatively affected investor confidence.
Some of the country’s biggest and most influential business groups have urged Congress to treat the franchise renewal fairly, noting the media’s critical role in the economy.
Human rights groups also condemned Calida’s move as a form of harassment and a threat to press freedom in the Philippines. – Rappler.com