In its latest report to the Philippine Stock Exchange, GMA Holdings Inc. reported that foreigners owned 78.592 million or 10.89 percent of the Philippine Depository Receipts (PDRs) it issued as of June 30.
This is less than half of the 173.703 million or 23.64 percent of the GMA PDRs owned by foreigners as of December 2018.
Bilyonaro Felipe Gozon acquired part of the PDRs disposed by the foreigners during the period.
GMA issued the latest report on its outstanding PDRs on July 15 or five days after a House committee voted 70-11 to reject ABS-CBN’s franchise applications for several violations, including breach of the constitutional ban on foreign ownership in media.
In a statement, GMA maintained that its PDRs were legal and ” this was done in compliance with the regulations of the Securities and
Exchange Commission and of the Philippine Stock Exchange.”
GMA Network formed GMA Holdings solely for the issuance of PDRs in 2006.
ABS-CBN was the first media firm allowed to issue PDRs (crafted for the Philippines by Romulo Mabanta Buenaventura Sayoc & De Los Angeles senior partner Cynthia Roxas-Del Castillo) to raise funds for cash-starved firms hammered by the 1997 financial crisis.
The House of Representatives, however, does not see any reason to relax the ban on foreign ownership in media considering that “more than two decades had already passed since the crisis and ABS-CBN no longer suffers from the plunge it took as evidenced by the billions of income it has earned over the past years.”
During the hearing, the House established that the Securities and Exchange Commission’s grant of the permit to sell PDRs as securities pertained only to an authority to sell the same but not to the buying and selling of the PDRs which was handled by “self-regulatory organizations” like the Philippine Stock Exchange.
“The impression given by the issuance of PDRs is that it was resorted to creatively allow the participation of foreigners to fully-nationalized and partially-nationalized activities. The foreign holders of PDRs practically own 187 million underlying shares of ABS-CBN which is already 62 percent of the total, and nothing restricts ABS-CBN from issuing shares of stock to ABS-CBN Holdings and the latter from selling more PDRs representing all of its shares in ABS-CBN,” the House committee said.
In its technical working group report, the House committee sought for further legislative inquiry on the practice of issuing PDRs for industries required to be wholly owned and managed by Filipinos.