OSG asks high tribunal to cancel ABS-CBN franchise

THE country’s chief government lawyer has asked the Supreme Court to revoke the franchise of a media network critical of President Rodrigo R. Duterte, accusing it of “highly abusive practices.”

Solicitor General (OSG) Jose C. Calida in a statement on Monday said his office had filed a lawsuit accusing ABS-CBN Corp. of violating several laws, including one against foreign ownership in media.

ABS-CBN shares fell 30 centavos to P16.70 at the close of trading yesterday.

“We want to put an end to what we discovered to be highly abusive practices of ABS-CBN benefiting a greedy few at the expense of millions of its loyal subscribers,” he said in a statement.

“These practices have gone unnoticed or were disregarded for years.”

The media network called the lawsuit “an effort to shut down ABS-CBN to the serious prejudice of millions of Filipinos who rely on the network for news, entertainment and public service.”

“ABS-CBN complies with all pertinent laws governing its franchise and has secured all necessary government and regulatory approvals for its business operations,” it said in an e-mailed statement.

Senator Grace S. Poe-Llamanzares said her committee on public services would hear the broadcast giant’s application to extend its 25-year franchise, which will expire next month.

“As the Constitution mandates, the Senate’s jurisdiction over franchises remains despite the existence of the petition,” she said in a statement.

“I trust the court will decide on the basis of fairness and for the interest of the greatest number of people,” she added.

Presidential spokesperson Salvador S. Panelo said at a briefing Mr. Duterte had nothing to do with the lawsuit.

“There is a basis for his expression of displeasure,” he said, referring to Mr. Duterte’s attacks on the network in the past. “But it doesn’t mean he had anything to do with the petition.”

Mr. Duterte had accused ABS-CBN of refusing to air his campaign ad during the 2016 elections.

Mr. Calida accused ABS-CBN of using an “elaborately crafted corporate veil” to allow foreign investors to take part in its ownership. The lawyer had also accused Rappler, a news website similarly critical of the Duterte administration, of allowing foreign ownership that the 1987 Constitution bars.

Like Rappler, ABS-CBN allegedly violated the ownership restriction when it issued Philippine depositary receipts to foreigners.

The financial instruments allow foreign funds to buy into the company, allowing it to raise funds globally.

‘VINDICTIVE MOVE’
ABS-CBN also went beyond the scope of its legislative franchise by “broadcasting for a fee,” Mr. Calida said. The company allegedly launched and operated a pay-per-view channel in ABS-CBN TV Plus, the KBO Channel, without regulatory approval.

Unit ABS-CBN Convergence, Inc. had also resorted to an “ingenious corporate layering scheme” in order to transfer its franchise without congressional approval, he said.

It also failed to list its shares on the Philippine Stock Exchange within five years, which was a condition of its franchise, Mr. Calida said.

Eleven bills seeking to extend the franchise have been filed at the House of Representatives and one at the Senate.

Ms. Llamanzares said Mr. Calida’s lawsuit only applies to ABS-CBN’s current franchise. “What we will give them now, just in case, is a franchise from 2020,” she told reporters in Filipino.

Senator Risa N. Hontiveros called the lawsuit “a vindictive move against critical journalism.”

Senator Juan Miguel F. Zubiri, a Duterte ally, told a separate briefing most senators have expressed support for the franchise extension.

“Technically, we can pass the measure in three weeks,” he said.

Cagayan de Oro Rep. Rufus B. Rodriguez called Mr. Calida’s lawsuit an “unconstitutional encroachment of the exclusive power of Congress to grant franchises.”

Albay Rep. Edcel C. Lagman, one of the lawmakers who filed a resolution seeking the franchise extension, said the suit was “unwarranted and misplaced.”

He also said the case should have been filed before a trial court because it involves factual questions that the high court was incapable of resolving.

Congress will go on a two-month Holy Week break starting March 14. — Charmaine A. Tadalan, Gillian M. Cortez and Genshen L. Espedido