REPUBLIC OF THE PHILIPPINES

SUPREME COURT
MANILA

ABS-CBN CORPORATION
Petitioner,

GR. NO. 252119

FOR: CERTIORARI AND PROHIBITION
WITH URGENT APPLICATIONS FOR
-versus- THE ISSUANCE OF A TEMPORARY
RESTRAINING ORDER AND/OR A
WRIT OF PRLEIMINARY INJUNCTION

NATIONAL TELECOMMUNICATIONS
COMMISSION, THE HOUSE OF
REPRESENTATIVES OF THE
PHILIPPINES, REPRESENTED BY REP.
ALLAN PETER S. CAYETANO, IN HIS
CAPACITY AS SPEAKER OF THE HOUSE
OF REPRESENTATIVES AND THE
SENATE OF THE PHILIPPINES,
REPRESENTED BY SEN. VICENTE C.
SOTTO III, IN HIS CAPACITY AS
PRESIDENT OF THE SENATE1.
Respondents,

x--------------------------------------------x

MEMORANDUM
“We exist to serve the Filipino. We exist to inform and to entertain through creative content for any
distribution platform. We innovate, diversify, and expand into enterprises where our expertise in content
creation opens new businesses and service opportunities. We promote the best in Filipino talent and reflect
the true sentiment of the Filipino2”

COMES NOW the Petitioner, ABS CBN CORPORATION (“ABS-CBN”), through the
undersigned collaborating law office, and unto this Honorable Court, hereby respectfully submits
its Memorandum for the above captioned case.

ANTECEDENTS AND THE FRANCHISE RENEWAL BILLS

1. On March 30, 1995 ABS-CBN was granted a legislative franchise to “construct, operate
and maintain, for commercial purposes and in public interest, television and radio
broadcasting stations in and throughout the Philippines” under RA 7966. The franchise was

1
Order from the SC, dated, May 19, 2020 of which it ordered that the Senate and the House be impleaded as parties
to this petition
2
ABS CBN Corporate Mission, retrieved from https://www.abs-cbn.com/governance/reports/annual-reports/2018-
annual-report-presentation/id-80, accessed on July 6, 2020
 valid for a term of twenty-five years from the law’s effectivity on May 4, 1995 or until
May 4, 20203.
2. Various bills both in the Senate and the House had been filed as early as 2014, during the
term of the 16th Congress seeking to renew the legislative franchise granted to ABS CBN.
The first such bill filed was House Bill No. 4997 entitled “An Act Renewing the Franchise
Granted to ABS-CBN Corporation (formerly ABS-CBN Broadcasting Corporation) Under
Republic Act No. 7966 Or “An Act Granting the ABS-CBN Broadcasting Corporation a
Franchise to Construct, Install, Operate and Maintain Television and Radio Broadcasting
Stations in the Philippines, and for Other Purposes for Twenty-Five (25) Years from
Effectivity of this Act” filed by Isabela 4th District Rep. Giordigi P. Aggabao4, said bill did
not make it out of the Committee Level, thus it eventually lapsed.
3. In the 17th Congress, in November 2018, a House Bill No. 4349 entitled “An Act Renewing
the Franchise Granted to ABS-CBN Corporation (formerly ABS-CBN Broadcasting
Corporation) Under Republic Act No. 7966 Or “An Act Granting the ABS-CBN
Broadcasting Corporation a Franchise to Construct, Install, Operate and Maintain
Television and Radio Broadcasting Stations in the Philippines, and for Other Purposes for
Twenty-Five (25) Years from Effectivity of this Act” was filed before the House by Rep.
Micaela S. Violago of Nueva Ecija’s 2nd Congressional District5, said bill did not make it
out of the Committee Level, like HB No. 4997 thus it eventually lapsed.
4. In the present 18th Congress, there have been numerous bills filed seeking to renew the
franchise of ABS-CBN. It will be listed down in the first table below, listed in the table, is
the Bill Number, its sponsor and the date when it was filed, all bills were pending before
the House Committee on Legislative Franchises. All of the bills, for all purposes have the
same intent and that is to grant and renew ABS-CBN’s Franchise for another twenty-five
years.
Table No. 1
ABS CBN Franchise Renewal Bills filed before the House of Representatives6
HB Sponsor/s Cong. District/Party List Date Filed
No. 676 Micaela S. Violago Nueva Ecija’s 2nd July 1, 2019
No. 3521 Rose Marie J. Arenas Pangasinan’s 3rd August 6, 2019
No. 3713 Joy Myra S. Tambunting Paranaque City’s 2nd August 8, 2019
No. 3947 Sol Aragones Laguna’s 3rd August 14, 2019
No. 4305 Vilma Santos Recto Batangas’ 6th (Lipa City) September 2, 2019
No. 5608 Aurelio D. Gonzales Jr. Pampanga’s 3rd November 29, 2019
Johnny D. Pimentel Surigao Del Sur’s 2nd
Paulino Salvador C. Leachon Oriental Mindoro’s 1st
No. 5705 Rufus C. Rodriguez Cagayan De Oro City’s 2nd December 9, 2019
No. 5723 Jospehine Y. Ramirez-Sato Occidental Mindoro December 9, 2019

3
Petition page 2
4
Id. Page 2-3
5
Id page 3
6
Id pages 2-5
No. 6572 Carlos Isagani T. Zarate Bayan Muna January 27, 2020
Ferdinand R. Gaite Bayan Muna
Eufemia C. Cullamat Bayan Muna
France L. Castro ACT Teachers
Sarah Jane I. Elago Kabataan
No. 6138 Mark O. Go Baguio City January 30, 2020
No. 6293 Loren Legarda Antique February 13, 2020

5. In addition to the bills listed in the previous paragraph, three Resolutions have been filed
before the House in relation to the renewal or extension of ABS-CBN’s franchise. It will
be listed down in the second table below, listed in the table, is the House Resolution
Number, its sponsor/s and the date when it was filed. HR No. 639 filed by Representatives
Lagman et. al. urges the House Committee on Legislative Franchises to report without
delay, the pending franchise bills of ABS-CBN for plenary action. HJR No. 29 filed by
Rep. del Mar seeks the extension of the current franchise granted to ABS-CBN until the
end of the 18th Congress or until June 30, 2022, in order to give additional time for Congress
to assess and review the pending franchise bills. HJR No. 29 filed by Rep. Rufus Rodriguez
seeks to extend the franchise of ABS-CBN until May 4, 2021, to give Congress enough
time to thoroughly study and debate on the pending Franchise bills.
Table No. 2
House Resolutions with regard to the renewal/extension of ABS CBN’s franchise7
HR/HJR Sponsor/s Cong. District/Party List Date Filed
HR No. 639 Edcel Lagman Albay’s 1st January 6, 2020
Micaela S. Violago Nueva Ecija’s 2nd
Jose Christopher S. Belmonte Quezon City’s 6th
Joy Myra S. Tambunting Paranaque City’s 2nd
Johnny D. Pimentel Surigao Del Sur’s 2nd
Emmanuel Billones Capiz’s 1st
France L. Castro ACT Teachers
Carlos Isagani T. Zarate Bayan Muna
Ferdinand R. Gaite Bayan Muna
Eufemia C. Cullamat Bayan Muna
Arlene D. Brosas GABRIELA
HJR No. 28 Raul V. del Mar Cebu City’s 1st February 18, 2020
HJR No. 29 Rufus C. Rodriguez Cagayan De Oro City’s 2nd February 26, 2020

6. Meanwhile in the Senate, there have been three bills filed with regard to the Franchise of
ABS-CBN. It will be listed down in the third table below, listed in the table, is the Bill
Number, its sponsor and the date when it was filed. For all intended purposes, SB Nos. 981
and 1403 had the same spirit and intent that was to renew and grant ABS-CBN a new
franchise valid for a twenty-five year period. SB No. 1307 meanwhile sought to extend the
current franchise until December 31, 2020, while Congress is still deliberating on the issue
of franchise renewal.

7
Id pages 5-6
 Table No. 3
Senate Bills with regard to the renewal/extension of ABS CBN’s franchise8
SB Sponsor/s Political Party and Bloc Date Filed
No. 981 Leila M. De Lima Liberal Party-Minority August 28, 2019
Ralph G. Recto Nacionalista Party-Majority
Emmanuel “Manny” S. Pacquiao PDP-LABAN-Majority
No. 1307 Ramon “Bong” S. Revilla Jr. Lakas-CMD-Majority February 26, 2020
No. 1403 Ramon “Bong” S. Revilla Jr. Lakas-CMD-Majority March 5, 2020

THE QUO WARRANTO PETITION FILED BY

THE OFFICE OF THE SOLICITOR GENERAL

7. On February 10, 2020, the Republic through the Office of the Solicitor General (OSG)
initiated a case for Quo Warranto against ABS-CBN Corporation and ABS-CBN
Convergence before this court, docketed as G.R. No. 251358. In the petition the Republic
alleges that the issuance of Philippine Depositary Receipts by ABS-CBN circumvents the
restriction of foreign ownership of Mass Media provided under Section 11, Article XVI of
the Constitution.
8. Thereafter, upon the filing of the said petition, ABS-CBN issued a statement simply to put
it “We did NOT violate the law”. The allegations cited by the Office of the Solicitor
General in his press statement are without merit. ABS-CBN complies with all pertinent
laws governing its franchise and has secured all necessary government and regulatory
approvals for its business operations9. It thereafter filed its Comment Ad Cautelam dated
February 21, 2020 before the Supreme Court.
9. On June 23, 2020, the Court dismissed the Quo Warranto petition to revoke ABS-CBN
Corporation's franchise, wherein it stated that the petition is already moot and academic as
the franchise already expired, therefore the Court would not be changing anything
by voiding the franchise ab initio10.

THE CEASE AND DESIST ORDER

ISSUED BY THE NTC

10. Due to the stringent refusal of the House to Act on the Franchise Bills of ABS CBN as
stated in Paragraphs 3-5 of this memorandum, there had been no progress at all on the
renewal of ABS-CBN’s franchise until the Senate acted on its own accord. Senator Grace
Poe, Chairperson of the Committee on Public Services chaired the hearing, wherein ABS-
CBN executives were present together with Government Officials from the relevant

8
Id pages 6-7
9
Statement of ABS-CBN on OSG’s Quo Warranto Petition: We Did Not Violate the Law, retrieved from
https://news.abs-cbn.com/news/02/10/20/read-statement-of-abs-cbn-on-osgs-quo-warranto-petition-we-did-not-
violate-the-law, accessed on July 6, 2020
10
SC junks quo warranto complaint vs ABS-CBN, retrieved from https://newsinfo.inquirer.net/1297958/osg-mulling-
to-ask-sc-to-reconsider-dismissal-of-quo-warranto-case-vs-abs-cbn, accessed on July 3, 2020
 offices. The conclusion reached after the hearing held on February 24, 2020 is that there
was no breach of laws or franchise terms by ABS-CBN
11. On that same day, Justice Secretary Menardo I. Guevarra told the Senate Committee on
Public Services that the National Telecommunications Commission can give a provisional
authority for ABS-CBN to continue operating. He added that based on "equity," the
network should be allowed to stay on air even when its franchise expires on May 4, 2020.
This was in response to the query of the NTC when it sought advice from DOJ on whether
or not to allow ABS-CBN to continue its operations beyond May 4.
12. The House of Representatives eventually wrote to the NTC asking to issue the network
a provisional permit so that it can continue broadcasting pending the passage of a bill
renewing its franchise.
13. NTC Commissioner Gamaliel Cordoba told the House Committee on Legislative
Franchises that it will issue a provisional authority to ABS-CBN, saying it will heed
Guevarra's advice.
14. Solicitor General Jose Calida’s however warned the NTC Commissioners that if they issue
such Provisional Authority, they could risk subjecting themselves to prosecution under the
country’s anti-graft and corruption laws should they issue the “unlawful” PAs. Calida said
the NTC could not grant provisional authorities (PAs) to ABS-CBN Corporation and its
affiliate, ABS-CBN Convergence, Inc. because it must first secure a franchise from
Congress11.
15. Despite Senate Resolution No. 40, the House of Representatives’ committee on legislative
franchises’ letter, the guidance of the Department of Justice, and the sworn statement of
NTC Commissioner Gamaliel Cordoba, the NTC did not grant ABS-CBN a provisional
authority to operate while its franchise renewal remains pending in Congress.
16. On May 5, 2020, a day after the Franchise issued to ABS-CBN through RA No. 7966, the
National Telecommunications Commission issued an Order directing petitioner ABS CBN
to Cease and Desist from operating its radio and television stations due to the lack of a
franchise. In compliance with the said Order, petitioner went off air on 7:52 P.M., the first
time it went off air since September 23, 1972.
17. It led ABS-CBN to file this present petition for the Issuance of a Temporary Restraining
Order and a Writ of Preliminary Injunction. It argues it wasn’t given due process over the
NTC’s issuance of the Cease and Desist Order dated May 5, 2020. Extensive discussion
over the said violation was discussed in its Petition before the Supreme Court. This
memorandum is an offshoot of an issue raised against the petitioner.

OWNERSHIP REQUIREMENTS IN
THE 1987 CONSTITUTION OF THE
PHILIPPINES

11
Calida warns NTC vs granting provisional authority to ABS-CBN, Philippine Daily Inquirer by Christia Marie Ramos,
retrieved from https://newsinfo.inquirer.net/1268851/calida-warns-ntc-vs-granting-provisional-authority-to-abs-
cbn, accessed on July 6, 2020
 18. Section 11, Paragraph 1 of Article XVI of the 1987 Constitution states 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.”
19. The aforementioned Constitutional provision means that mass media companies operating
in the Philippines must be one hundred percent Filipino owned because allowing foreign
entities to infiltrate our mass media outlets would bring about a looming threat of foreign
influence and control in one country, which ultimately, would diminish our constitutionally
protected sovereignty.
20. Petitioner ABS-CBN submits that all of its stockholders are Filipinos, contrary to the
allegation of the Republic through the OSG that the PDRs issued by the Corporation are a
mere farce for foreign control over itself. In the Ponencia of Senior Associate Justice (Ret.)
Antonio Tirol Carpio in the case of Gamboa vs. Teves12 it had been determined in the
majority opinion penned by the latter that “the term "capital" in Section 11, Article XII of
the 1987 Constitution refers only to shares of stock entitled to vote in the election of
directors”. Thus contradicting the claim of the Republic through the OSG that owners of
PDRs are owners of ABS CBN, thus circumventing the bar on foreign ownership. Thus an
owner of a PDR issued by ABS-CBN is not a stockholder of the Corporation itself. It shall
be thoroughly discussed in the next section.
21. In the fourth table below, enumerated and listed are the Top Shareholders of ABS CBN
Corporation by Common Shares held. In the fifth table below, enumerated and listed are
the Top Shareholders of ABS CBN Corporation by Preferred Shares held. The information
in the tables shall include the name and nationality of the stockholder, the type of share and
the number of shares he possesses and the percentage of ownership of the company, in
order to prove that foreigners do not own a single share of ABS-CBN. The rebuke and
arguments shall be discussed in the next section of this memorandum.

Table No. 4
Top Shareholders of ABS-CBN Corporation by Common Shares13
Name and Nationality Share Type Number of Shares % of Ownership
1. Lopez Inc. -Filipino Common 480,933,747 56.44%
2. PCD Nominee Corporation -Filipino Common 351,698,970 41.27%
3. Jose Mari Chan -Filipino Common 1,257,130 0.15%
4. Chiong Tiong Keng -Filipino Common 1,111,500 0.13%
5. ABS-CBN Foundation Inc. -Filipino Common 780,995 0.09%
6. Eugenio L. Lopez III -Filipino Common 769,960 0.09%
7.Crème Investment Corporation -Filipino Common 417,846 0.05%
8. FG Holdings -Filipino Common 386,270 0.05%

12
Gamboa vs. Teves et. al., G.R. No. 176579, retrieved from
https://www.chanrobles.com/cralaw/2011junedecisions.php?id=567, accessed on July 6, 2020
13
ABS CBN General Information Sheet for FY 2019, page 8-10, retrieved from https://www.abs-
cbn.com/governance/reports/general-information-sheet/general-information-sheet-for-fy-2019/id-87, accessed
on July 3, 2020
9. Manuel M. Lopez -Filipino Common 351,196 0.04%
10. Charlotte C. Cheng -Filipino Common 340,000 0.04%
11. Cynthia D. Ching -Filipino Common 337,500 0.04%
12. Rolando P. Valdueza -Filipino Common 284,500 0.03%
13. Carlo Lopez Katigbak -Filipino Common 249,500 0.03%
14. Ma. Socorro Valdueza Vidanes -Filipino Common 239,500 0.03%
15. La Suerte Cigar & Cigarette Factory -Filipino Common 205,500 0.02%
16. Laurenti Milleza Dyogi -Filipino Common 191,500 0.02%
17.Alberto G. Mendoza and/or Jeanie Mendoza - Common 168,250 0.02%
Filipino
18. Mimi Chua -Filipino Common 162,390 0.02%
19. Majograjo Dev. Corporation-Filipino Common 140,700 0.02%
20. Olivia M. Lamasan -Filipino Common 140,060 0.02%
21. Others -Filipino Common 11,990,552 1.41%
TOTAL NUMBER OF SHARES AND PERCENTAGE 852,076,706 100%

Table No. 5
Top Shareholders of ABS-CBN Corporation by Preferred Shares14
Name and Nationality Share Type Number of Shares % of Ownership
1. Lopez Inc. -Filipino Preferred 987,130,246 98.71%
2. Tower Securities-Filipino Preferred 4,431,583 0.44%
3. Citibibank NAFAO Maybank ATR Kim Eng Capital Preferred 2,244,787 0.22%
Partners Inc. Trust as Inv. Manager-Filipino
4. Manuel M. Lopez and/or Ma. Teresa L. Lopez - Preferred 1,643,032 0.16%
Filipino
5. Abacus Securities Corporation -Filipino Preferred 727,085 0.07%
6. Abacus Securities Corporation -Filipino Preferred 699,091 0.07%
7.Value Ouest Securities Corporation -Filipino Preferred 662,020 0.07%
8. GlobaLinks Securities and Stocks Inc.-Filipino Preferred 297,081 0.15%
9. Manuel M. Lopez -Filipino Preferred 187,518 0.09%
10. Maybank ATR Kim Eng Securities Inc. -Filipino Preferred 182,083 0.09%
11. Belson Secuities Inc. -Filipino Preferred 128,905 0.01%
12. AsiaSec Securities Inc. -Filipino Preferred 120,000 0.01%
13. PCCI Securities Brokers Corporation -Filipino Preferred 112,022 0.01%
14. Ricky See Eng Huy -Filipino Preferred 103,901 0.01%
15. Noli De Castro -Filipino Preferred 93,372 0.01%
16. Meridian Securities Inc. -Filipino Preferred 93,133 0.01%
17. Edmond T. Aguilar Preferred 71,961 0.01%
18. Leonardo P. Katigbak -Filipino Preferred 66,702 0.01%

14
ABS CBN General Information Sheet for FY 2019, page 10-11, retrieved from https://www.abs-
cbn.com/governance/reports/general-information-sheet/general-information-sheet-for-fy-2019/id-87, accessed
on July 3, 2020
19. Kris Aquino-Filipino Preferred 64,136 0.01%
20. Imperial, De Guzman, Abalos and Co Inc. -Filipino Preferred 56,641 0.01%
21. Others -Filipino Preferred 884,701 0.09%
TOTAL NUMBER OF SHARES AND PERCENTAGE 1,000,000,000 100%

22. As owners of the corporation, the economic benefits will necessarily accrue to them. There
is thus no logical reason why Filipino shareholders will allow foreigners to have greater
economic benefits than them. It is illogical to speculate that they will create shares which
have features that will give greater economic interests or benefits than they are holding and
not benefit from such offering, or that they will allow foreigners to profit more than them
from their own corporation15.
23. The Constitution expressly declares as State policy the development of an economy
"effectively controlled" by Filipinos. Consistent with such State policy, the Constitution
explicitly reserves the ownership and operation of public utilities to Philippine nationals,
who are defined in the Foreign Investments Act of 1991 as Filipino citizens, or corporations
or associations at least 60 percent of whose capital with voting rights belongs to Filipinos.
The FIA's implementing rules explain that "for stocks to be deemed owned and held by
Philippine citizens or Philippine nationals, mere legal title is not enough to meet the
required Filipino equity. Full beneficial ownership of stocks, coupled with appropriate
voting rights is essential." In effect, the FIA clarifies, reiterates and confirms the
interpretation that the term "capital" in Section 11, Article XII of the 1987 Constitution
refers to shares with voting rights, as well as with full beneficial ownership. This is
precisely because the right to vote in the election of directors, coupled with full beneficial
ownership of stocks, translates to effective control of a corporation16.
24. Thus all arguments of the Republic against ABS-CBN are all considered debunked. We
shall now move to the discussion of Philippine Depositary/Deposit Receipts and it shall be
discussed thoroughly in the next section.

PHILIPPINE DEPOSITORY RECEIPTS

25. Philippine Deposit Receipts (PDRs) as defined by the Philippine Stock Exchange is a
security which grants the holder the right to the delivery of sale of the underlying share.
PDRs are not evidences or statements nor certificates of ownership of a corporation17.

15
Roy vs. Herbosa, G.R. No. 207246, retrieved from
https://lawphil.net/judjuris/juri2016/nov2016/pdf/gr_207246_2016.pdf, accessed on July 6, 2020
16
Gamboa vs. Teves Resolution G.R. No. 176579, retrieved from
https://lawphil.net/judjuris/juri2012/oct2012/gr_176579_2012.html, accessed on July 6, 2020
17
Philippine Deposit Receipts (PDRs), PSE Academy Glossary, retrieved from
https://www.pseacademy.com.ph/LM/glossary/Glossary.html#P, accessed on July 3, 2020
 26. A PDR is a document that gives its holder, in consideration for the payment of a certain
price, the right to “own” the stocks of a company and to receive their dividends or interest.
In spite of that right, however, title over the stocks remains with the company.18
27. Rule 8 of the SRC prohibits the sale/distribution or offer for sale/distribution of securities
within the Philippines without the seller/offer or filing a registration statement with the
securing the approval of the SEC19
28. The ABS-CBN PDRs were registered with, and approved by, the SEC in 1999 and 2014
before they were sold to the public. After reviewing the provisions of the PDRs and
ultimately finding that these provisions were compliant with Philippine law, the SEC issued
Certificates of Permit to Offer Securities for Sale to ABS-CBN Holdings dated 4 October
199920.
29. Additional ABS-CBN PDRs were issued subsequently and these PDRS were also
registered with, and approved by, the SEC in 2014. The SEC similarly issued a Certificate
of Permit to Offer Securities for Sale to ABS-CBN Holdings dated 7 January 201421.
30. What the Republic failed to elaborate on are the “certain conditions” imposed on the right
of a PDR Holder to the delivery of an ABS-CBN Share, particularly in the case of
foreigners. Under Condition 5.3 of the PDR Instrument, if the PDR holder is a foreigner
and he exercises the PDR, the only right he has is to receive the net proceeds of the sale of
the underlying ABS-CBN share after it is sold through an eligible broker in the “open
market” or the PSE. At no instance will the ABS-CBN share be delivered to a foreigner.
31. The right of a PDR Holder to receive cash distributions from ABS-CBN Holdings is subject
to Condition 9 of the PDR Instrument. Condition 9 provides that the PDRs do not grant
PDR Holders any right to dividends declared by ABS-CBN. Not being shareholders of
ABS-CBN, they cannot demand ABS-CBN to declare dividends, or claim such dividends
directly from ABS-CBN. Instead, PDR Holders are granted only the right to distribution
from ABS-CBN Holdings of the amount remaining after the expenses and other obligations
of ABS-CBN Holdings are paid22.
32. The Securities and Exchange Commission through Commissioner Amatong has also stated
that “There has been an instance where ABS-CBN offered, issued, or sold PDRs to the
public without SEC’s authorization or knowledge”. He also stressed that “Philippine Stock
Exchange (PSE) also has a mechanism in place to ensure that no foreigners would acquire
stocks in mass media companies and that As far as we know, there has been no instance
where the nationality restrictions for any of our companies that are engaged in fully

18
Misconception on PDRs by Raul J. Palabrica, Philippine Daily Inquirer, retrieved from
https://business.inquirer.net/244546/misconception-on-pdrs, accessed on July 6, 2020.
19
Comment Ad Cautelam, Republic of the Philippines vs. ABS-CBN Corporation and ABS-CBN Convergence, G.R. No.
251358, retrieved from http://www.biznewsasia.com/wp-content/uploads/2020/03/20-37-%E2%80%A2-ABS-CBN-
COMMENT-ad-Cautelam-Quo-
Warranto.pdf?fbclid=IwAR17_kqw9VNK189CJvXmFsfqY4xK4gZcmSyQm413yX0jiSzrtXIcfsR_eIc, accessed on July 3,
2020
20
Id.
21
Id.
22
Comment Ad Cautelam, paragraph 121, Republic vs. ABS CBN
 nationalized or partially nationalized activities have been breached and this is due to the
mechanisms put in place between the Philippine Stock Exchange23.
33. As explained by the Dean of the UST Faculty of Civil Law, Atty. Nilo T. Divina, one of
the country’s experts in commercial law “PDRs are financial instruments used by media
entities to allow foreign investments without violating the constitutional rule that media
companies should be 100% Filipino-owned. If a company issues a PDR to an investor, that
investor will be entitled to the dividends of the company. But the PDR holder has no right
to vote and the PDR holder is "not a shareholder of the company."24
34. Having approved the terms and conditions of the PDRs through the SEC, and having never
disavowed the SEC’s approval of the PDRs, the Republic is now estopped from asserting
that those same terms violate the Constitutional restriction on foreign ownership25.
35. The PDR holders’ rights are not equivalent to the full beneficial ownership rights of the
shareholders of ABS-CBN. Under the Revised Corporation Code, the following rights are
granted to each shareholder26:
a. Right to the issuance of a stock certificate (Section 62) and to have certificates replaced
in lieu of those lost, stolen or destroyed (Section 72);
b. Right to have the transfer in his favor recorded in the Stock and Transfer Book (Section
62);
c. Right to be informed of the annual or special meetings of the corporation (Section 49);
d. Right to participate in the annual or special meetings of the corporation (Section 49);
e. Right to vote on the following matters:
i. Elections of the Board of Directors (Section 23);
ii. Extension or Shortening of Corporate Term (Section 36);
iii. Increase or Decrease of Capital Stock (Section 37);
iv. Creation or Increase of Bonded Indebtedness (Section 37);
v. Sale or Other Disposition of Assets (Section 39);
vi. Planned merger or consolidation (Section 75);
vii. Amendments of Bylaws (Section 47);
f. Right to be elected as a Director (Section 22);
g. Right to be elected as the President of the corporation (Section 24);
h. Right to remove directors (Section 27);
i. Pre-emptive right over the sale of shares (Section 38);
j. Power to inspect and demand reproduction of corporate books and records (Section
73);
k. Right to be furnished the financial statements of the corporation (Section 74); and

23
SEC has no basis to say ABS-CBN violated regulation on PDRs – Amatong, by Neil Arwin Mercado, retrieved from
https://newsinfo.inquirer.net/1290099/sec-has-no-basis-to-say-that-abs-cbn-violated-regulation-on-pdrs,
accessed on July 6, 2020
24
Explainer, is Calida’s ABS-CBN PDR theory bad for big business by Lian Buan, Rappler, retrieved from
https://www.rappler.com/newsbreak/iq/251547-explainer-calida-abs-cbn-pdr-theory-impact-business, accessed
on July 6, 2020.
25
Comment Ad Cautelam paragraph 111 Republic vs. ABS CBN
26
Comment Ad Cautelam paragraph 118 Republic vs. ABS CBN
 l. Appraisal Right (Section 80).
36. The PDRs do not grant any of the foregoing rights to PDR Holders as against ABS-CBN.
In fact, Condition 4 of the PDR Instrument states that unless there is a valid transfer of the
share to a Filipino citizen, ABS-CBN Holdings shall remain the registered owner of the
underlying ABS-CBN shares. Voting rights with respect to the shares will likewise be
retained and exercised by ABS-CBN Holdings

CLOSING ARGUMENTS
37. PDRs are purely financial instruments and not shares and that entitle the holders to vote or
participate in the management affairs of ABS-CBN Corp. The only expectations of
investors in PDRs are the cash distribution and gains they could derive in the trading and
transfer of ownership of the PDRs27.
38. PDRs are, like hedge funds, investment instruments whose holders invest in to earn profits
and not to gain control of the company. Thus, when the holders are no longer satisfied with
receiving dividends or interest and the listed price of their PDRs or that of the stocks of the
company goes high enough to allow a satisfactory return on their investment, they are quick
to sell their PDRs28.
39. The power to vote and control the affairs of the corporation, therefore, remains the essential
element when determining the ownership of a corporation. The Republic does not allege
that the PDRs grant control over ABS-CBN to foreigners. It therefore acknowledges that
control, and therefore ownership, over ABS-CBN is with its Filipino shareholders, as
required by the Constitution29
40. SEC Commissioner Ephyro Luis B. Amatong stated in a Joint Committee Hearing of the
House Committee on Legislative Franchise and Committee on Good Governance and
Public Accountability that “As far as the Securities and Exchange Commission (SEC) is
concerned, it does not have any basis to say that media giant ABS-CBN violated its rules
on the issuance and selling of Philippine Depositary Receipts (PDRs) to the public”. It has
also been stated that ABS-CBN (and GMA7) has been in “good faith” as far as an offering,
issuing, and selling PDRs to the public is concerned.30
41. ABS-CBN acted in good faith in 1999 and 2013 when they presented themselves by
presenting themselves and applying before SEC to secure approval before offering their
PDRs to the public. This is a clear indication of intention and willingness to abide with
guidelines prescribed by the government and to comply with the fundamental law of the
land, the 1987 Constitution which mandates that ownership of media entities such as theirs
shall only belong to Filipino citizens.

27
PDR owners can’t own ABS-CBN, by Divina Nova Joy Dela Cruz, The Manila Times retrieved from
https://www.manilatimes.net/2020/06/12/news/top-stories/pdr-holders-cant-own-abs-cbn/731123/, accessed on
July 6, 2020
28
Misconception on PDRs by Raul J. Palabrica, Philippine Daily Inquirer, retrieved from
https://business.inquirer.net/244546/misconception-on-pdrs, accessed on July 6, 2020.
29
Comment Ad Cautelam, paragraph 129 Republic vs. ABS CBN
30
Id. at 21
 42. The Securities Exchange Commission, having made clear that the said issuance of PDRs
is not illegal and ABS-CBN’s PDRs are not evidence of ownership. The Court of Appeals'
decision in Rappler's PDR case says the issuance of PDR per se is not illegal. This
memorandum has made clear that all the allegations of the Republic against petitioner
ABS-CBN are baseless and a mere farce, thus deserve no consideration by the Honorable
Court.
43. The incoming Chairperson of the 2020 (turned 2021) Bar Examinations Justice Marvic
Mario Victor F. Leonen said in his address before the oath taking of the successful bar
candidates for 2019 said these very powerful words “Our silence, when we fall victim or
after we serve as accomplices to corrupt acts of the powerful, is also our own powerful
political act. Our silence maintains the status quo. It ensures that others will also be
victimized. Our silence in the face of abuse skews power to the system in favor of those
with resources and against those who need the law more. Our silence legitimizes greed
and undermines the power of public trust”. What has happened and transpired with the
franchise hearings conducted by the House, is more of a clown show and a mockery of the
process itself. They will have their time of reckoning someday, it may not be now, but the
Filipino people are watching. It may come at a time where people do not even expect it.
44. Carlo Lopez Katigbak in ABS CBN’s Annual Report for 2019 stated that “Our
commitment is to continue serving our audiences and our public, in any way we can. This
is our calling one that will never dim. This is why we exist. This is why we can face the
future with confidence that comes from believing that what we do matters to the people we
serve”. ABS-CBN remains committed to being in the Service of the Filipino, and we will
find ways to continue providing meaningful service to them.
45. For 66 years and counting, ABS-CBN remains committed and steadfast to being in the
Service of the Filipino Worldwide. Our commitment to the Filipino is to serve them
wherever they are. It is as if they never left the Philippines. The process of building
meaningful careers is accompanied with painful experience and soul-searching. ABS-CBN
maintains that it had not violated any of the terms prescribed in its previous franchise
granted to it by RA 7966. The petitioner maintains as stressed and explained many times
in this Memorandum that its PDRs are not a violation of the Constitution, nor can it be
considered as a mechanism that is used to circumvent the prohibition on foreign ownership
as enshrined in the Constitution.
46. Thus for our final word in this Memorandum, another quote from the Honorable Justice
Marvic Mario Victor F. Leonen “Making the right decisions during times of crisis is a
challenge. Often, you will choose whether you will put your career on the line. It takes a
huge amount of courage, and the same amount of conviction, to do what may seem
unpopular, dangerous, inconvenient, but right31”. For they say Justice and Equity is for all
and that Law, Truth and Fairness shall reign their hall and that they will uphold the
fundamental law. The petitioner, ABS-CBN thus submits itself to the judgment of the
Honorable Court for believes it will rule for what is right and just.

31
Justice Leonen addressed to the 2019 Successful Bar Candidates
 PRAYER

WHEREFORE, premises considered, it is most respectfully prayed upon the

Honorable Court that the following be granted :

1 . That this Memorandum filed by the Collaborating Counsel for ABS-CBN Corporation
dated July 8, 2020 be DULY NOTED;

2 . That the Court declares that the issuance of such PDRs DOES NOT CONSTITUTE
a CIRCUMVENTION of the PHILIPPINE OWNERSHIP LAWS as stipulated in
the Constitution;

3 . That the Philippine Depository Receipts (PDRs) issued by petitioner, ABS-CBN be

declared CONSTITUTIONAL;

Ot her j ust and equi t abl e rel i e fs under t h e for e goi ng are l i ke wi se pra ye d
for.
R espect ful l y subm i t t ed

Makati City for the City of Manila, Philippines, this 8th day of July, 2020

ROGERS, STARK, BANNER, ROMANOFF, ODINSON LAW OFFICES

Collaborating Counsel for the Petitioner

Office Address: 11/F Rogers Building, 1259 New York Ave. cor. California Drive, Makati City
Office Landline (02)980-1259-65 Website: www.rsbrolaw.com.ph

By:

CLARK STEVEN WILLIAM F. ROGERS

PTR No.3301596/1.3.20/ Makati City
IBP No. 079621/1.5.20/ Makati City
Roll No. 101358
MCLE Compliance No.VI-0035898
steve.rogers@rsbrolaw.com.ph

JOHN LYNDON ANTHONY R. STARK

PTR No.3301596/1.3.20/ Makati City
IBP No. 085101/1.5.20/ Quezon City
Roll No. 95661
MCLE Compliance No.VI-0035969
tony.stark@rsbrolaw.com.ph
 EDWARD FRANKLIN BRUCE C. BANNER
PTR No.3301596/1.3.20/ Makati City
IBP No. 085101/1.5.20/ Malolos City
Roll No. 98240
MCLE Compliance No.VI-0042198
bruce.banner@rsbrolaw.com.ph

ELIZABETH NATASHA ANASTASIA I. ROMANOFF

PTR No.3301596/1.3.20/ Makati City
IBP No. 013009/1.5.20/ Cebu City
Roll No. 99192
MCLE Compliance No.VI-0041593
natasha.romanoff@rsbrolaw.com.ph

FRIEDRICH THOR SILVERIUS L. ODINSON

PTR No.3301596/1.3.20/ Makati City
IBP No. 013009/1.5.20/ Iloilo City
Roll No. 97802
MCLE Compliance No.VI-0039071
thor.odinson@rsbrolaw.com.ph

GABRIEL D. HERNANDEZ
PTR No.3309257/1.3.20/ Makati City
IBP No. 063689/1.5.20/ Batangas City
Roll No. 110596
MCLE Compliance No.VI-0125911
gabriel.hernandez@rsbrolaw.com.ph

EXPLANATION

Undersigned counsel manifests that this Memorandum had been served to the adverse
parties through registered mail due to lack of messengerial manpower to effect personal service on
the parties. Receipts of the proof of service are hereby attached to this explanation.

GABRIEL D. HERNANDEZ

Copy Furnished by Registered Mail

SOLICITOR GENERAL JOSE C. CALIDA

Office of the Solicitor General
134 Amorsolo St., Legaspi Village, Makati City

NATIONAL TELECOMMUNICATIONS COMMISSION

NTC Building, BIR Road, East Triangle, Diliman, Quezon City

SECRETARY MENARDO I. GUEVARRA

Department of Justice
P. Faura St., Ermita, Manila
SECURITIES AND EXCHANGE COMMISSION
Secretariat Building, PICC Complex
Pasay City

SPEAKER ALLAN PETER S. CAYETANO

House of Representatives of the Philippines
Batasang Pambansa Complex, Batasan Hills, Quezon City, 1126

HON. FRANZ E. ALVAREZ

Chairman, Committee on Legislative Franchises
House of Representatives of the Philippines
Batasang Pambansa Complex, Batasan Hills, Quezon City, 1126

HON. JOSE ANTONIO R. SY-ALVARADO

Chairman, Committee on Good Government and Public Accountability
House of Representatives of the Philippines
Batasang Pambansa Complex, Batasan Hills, Quezon City, 1126

SENATE PRESIDENT VICENTE C. SOTTO III

Senate of the Philippines
GSIS Building, Financial Center, Sen. Jose W. Diokno Boulevard, Pasay City, 1300

SENATOR GRACE POE-LLAMANZARES

Chairperson, Committee on Public Services
Senate of the Philippines
GSIS Building, Financial Center, Sen. Jose W. Diokno Boulevard, Pasay City, 1300