OSG files quo warranto petition vs ABS-CBN seeking forfeiture of its legislative franchises

February 10, 2020

The Office of the Solicitor General has asked the Supreme Court to forfeit the legislative franchises of ABS-CBN Corp, and its subsidiary, ABS-CBN Convergence Inc. for violating the Constitution and for committing alleged “abusive practices” prejudicial to public interest.

Solicitor General Jose Calida on Monday filed the petition for quo warranto before the SC. He told reporters this was to stop the purported “abusive practices” of ABS-CBN.

This is the second time that Calida resorted to the filing of quo warranto petition before the Supreme Court. The first one was to seek the ouster of then Chief Justice Maria Lourdes Sereno, which took place in 2018.

The renewal of ABS-CBN franchise, which will expire in less than two months, has not been discussed in the House of Representatives.

“The legislative franchises of ABS-CBN Corp. and its subsidiary, ABS-CBN Convergence, Inc. must be revoked,” Calida said in a statement.

“We want to put an end to what we discovered to be highly abusive practices 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," he added.

Calida said: “A franchise is a special privilege granted by the State, and should be restricted only to entities which faithfully adhere to our constitution and laws.”

Calida said the petition will show that ABS-CBN has been broadcasting for a fee, which is beyond the scope of its legislative franchise.

Calida added ABS-CBN, hiding behind an "elaborately crafted corporate veil", has been allowing foreign investors take part in the ownership of the network which is in violation of the foreign interest restriction of mass media under the 1987 Constitution.

He pointed out Section 11, Article XVI of the Constitution provides that "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 Philippines must be 100 percent Filipino owned because they play an integral role in a nation's economic, political, and socio-cultural landscape," Calida said.

Calida claimed ABS-CBN issued Philippine Deposit Receipts (PDRs) through ABS-CBN Holdings Corp. to foreigners.

He alleged the ABS-CBN launched and operated pay-per-view channel in ABS-CBN TV plus , the KBO Channel, without permit from the National Telecommunications Commission.

“While it’s true that broadcasting is a business, the welfare of the people must not be sacrificed in the pursuit of profit,” Calida stressed.

ABS-CBN Convergence, Inc. (formerly Multi-Media Telephony Inc.) resorted to an ingenious corporate layering scheme to transfer its franchise without the necessary congressional approval, Calida said.

“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 indispensable condition in its franchise,” the chief state lawyer added. DMS