SC FINDINGS AND RECOMMENDATIONS

5) When ABS-CBN Holdings applied for registration of its PDRs with the SEC and
listing with the Philippine Stocks Exchange, it had fully disclosed that the PDRs
can be sold to anyone regardless of nationality.
ABS-CBN issued PDRs
to foreigners.
The Securities Regulations Code’s Implementing Rules and Regulations define “beneficial
owner or beneficial ownership” as “any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares voting power
(which includes the power to vote or direct the voting of such security) and/or investment
returns or power (which includes the power to dispose of, or direct the disposition of such
security).” 21
ABS-CBN Holdings Corp. issued over 298 million PDRs valued at PHP 46 per PDR. It admits
that only 111 million PDRs (37.4% of the total) with a value of about PHP 5 Billion were
issued to Filipinos. The bulk of said PDRs, about 187 million (62.6% of the total) amounting
to about PHP 8.6 Billion were issued to foreigners/non-Filipinos.
While ABS-CBN claimed that these PDRs were approved by SEC, SEC clarified that it had
no control as to the buyers of these PDRs.
REP. M. T. DEFENSOR. Pero kung sino pong bibili nun,
kung saan ibebenta, hindi niyo po alam iyon, hindi niyo po inaapprove
iyon. Bahala na po sila.
MR. AMATONG. That is correct, Your Honor. That was the
point I was trying to make kanina, that in the actual buying and
selling, that’s not reported to the SEC. It’s really our selfregulatory
organizations, the PSE and the PDEC that are aware
of the actual transfers.
REP. M. T. DEFENSOR. Thank you po. Thank you, Mr.
Chairman. 22
Further, SEC’s grant or approval of the permit to sell PDRs as securities pertained only to an
authority to sell the same but not to the validity and constitutionality of the terms thereof and
qualifications of the actual PDR holder. 23 It was thus shown that ABS-CBN’s PDRs entitles
the non-Filipino holder thereof to adjust the terms of the instrument and modify their own
rights, and these adjustments or modifications happen after the fact of registration with the
SEC.
PDRs of ABS-CBN
contains limitations on
its ownership rights in
favor of foreigners.
21
Section 1(A), Rule 3, IRR of the Securities Regulation Code; emphasis supplied.
22
TSN of the 11 June 2020 hearing, at IX-19.
23
TSN of the 11 June 2020 hearing, at IX-19.
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