Commentary

On Philippine Depository Receipts or PDRs

I don’t think that ABS-CBN’s lawyers would be so stupid to allow foreign ownership of the corporation despite the clear prohibition in the Constitution of foreign ownership of mass media, public utilities, and schools.
ABS-CBN made use of what are known as Philippine Depositary Receipts (PDRs). Now these PDRs do not actually confer ownership of the corporation to the holders of the PDRs. The relationship between the corporation and the holder of the PDR is closer to that of a creditor and debtor than that of a stockholder and the corporation. PDR holders do not have any say on how to govern and manage the corporation, the very danger thought of by the framers when they decided to restrict foreign ownership of certain industries.
(Rappler’s Omidyar PDRs were considered by the Securities and Exchange Commission to have contravened the Constitution because of the clause which required approval of at least 2/3 of the PDR holders for any change in the Articles of Incorporation or By-Laws or any action which may prejudice the rights of PDR holders.)
I abhor the actions of some would-be lawyers in confusing their circle of influence more by equating holding of PDRs with ownership in the sense utilized in the Constitutional text. I understand if you support Duterte and would like ABS-CBN to be shut down, but campaign for the shutting down honestly – do not utilize pseudo-legal reasoning which exposes your intellectual dishonesty. Unless, of course, you honestly believe in the first place that PDRs confer ownership, in which case you should have been failed by your corporation law professor.

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