OSG files petition for quo warranto versus ABS-CBN; asks SC to forfeit legislative franchise (From the Office of the Solicitor General, 10 February 2020)
The Office of the Solicitor General (OSG), led by Solicitor General Jose C. Calida today filed a petition for quo warranto at the Supreme Court to forfeit the legislative franchises of ABS-CBN Corporation and its subsidiary, ABS-CBN Convergence, Inc.
“We want to put an end to what we discovered to be highly abusive practies 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.
According to the OSG, its petition will show that ABS-CBN has been broadcasting for a fee, which is beyond the scope of its legislative franchise. Further, the media giant hiding behind an “elaborately crafted corporate veil, has been allowing foreign investors to take part in the ownership of a Philippine mass media entity, in gross violation of the foreign interest restriction of mass media provided under Section 11, Article XVI of the Constitution.
“ABS-CBN 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. While it is true that broadcasting is a business, the welfare of the people must not be sanctioned in the pursuit of profit,” Calida said.
Further, like Rappler, ABS-CBN had issued Philippine Deposit Receipts (PDRs) through ABS-CBN Holdings Corporation to foreigners, in violation of the foreign ownership restriction on mass media in the Constitution.
Section 11, Article XVI of the Constitution providest hat “The ownership and management of mass media shall be limited to citizens of the Philippines, or to corporations, cooperatives or associations, wholly-owned and managed by such citizens.” “This simply means that mass media companies operating in the Phlippines must be 100% Filipino owned because they play an integral role in a nation’s economic, political, and socio-cultural landscape,” the solicitor general said.
On the other hand, ABS-CBN Convergence, Inc. (formerly Multi-Media Telepony, Inc.) resorted to an ingenious corporate layering scheme in order to transfer its franchise without the necessary Congressional approval. It also failed to publicly offer any of its outstanding capital stock to any securities exchange within the Philippines within five years from the start of its operations, which is an indispensable condition in its franchise.
“The legislative franchise
of ABS-CBN Corporation and its subsidiary, ABS-CBN Convergence, Inc., must be revolked. A franchise is a special privilege granted by the State, and should be restricted only to entitites which faithfully adhere to our Constitution and laws,” Calida said.