SUN mobile broadband of Philippine Long Distance Telephone Co. becomes a reliable companion especially because our Globe internet at home has been out of commission since sometime last week.
Globe Telecom, a company controlled by the Zobels, with Singapore Telecommunication Pte. Limited as minority stockholder, has tried to expand its reach by taking over the Lopez-owned Bayan Telecommunication but has miserably failed this subscriber to its landline-broadband package.
I find it frustrating to find myself “disconnected” from the rest of the world and unable to read The Manila Times in the morning. I have reported the “disconnection” to a few Globe Telecom insiders, who, in turn, relayed the problem to the company’s outsourced service people, who either did not listen to them or refused to listen to their request to fix my connection problem.
Apparently, frustration is what we—the entire household—got in return for paying our monthly bills ahead of due date.
As of 12:00 noon when I finished writing this column, our Globe broadband still had no connection.
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The Securities and Exchange Commission may have failed in efficiently monitoring the ownership of media companies operating in the Philippines by allowing foreigners to hide their holdings behind Philippine Depository Receipts (PDRs).
Two listed companies have long been engaged in issuing PDRs to raise additional capital because such issuances are legal as far as the SEC is concerned. These are ABS-CBN Corp. and GMA Network Inc., which own and operate Channel 2 and Channel 7, respectively.
Since Due Diligencer has tackled the ownership profiles of the two major broadcasting groups, this piece is about PLDT and its MediaQuest Holdings Inc.
MediaQuest is neither a PLDT subsidiary nor an associate. It is, surprisingly, fully covered by PLDT in its financial filings.
If you were to closely scrutinize PLDT’s disclosures, you would find MediaQuest among “unlisted equity investments” as an entry under “employee benefits” but not under PLDT.
PLDT has a ready explanation for the category.
In a filing posted on the website of the Philippine Stock Exchange, PLDT explained that such benefits are defined as benefit pension plans, operating under the legal name “The Board of Trustees for the account of the Beneficial Trust Fund created pursuant to the Benefit Plan of PLDT Company and covering substantially all of our permanent and regular employees.”
This means MediaQuest, which is a holding company, is owned by PLDT employees, who also own the PLDT Beneficial Trust Fund, which, in turn, owns in their behalf 150 million PLDT voting preferred shares.
Ironically, PLDT attributes ownership of its trust fund to unnamed employees, who, however, do not exercise their voting rights. Instead, Manuel V. Pangilinan cast the votes of preferred shares as nominee of PLDT’s Indonesian-owned First Pacific Co. Ltd.
There may be nothing wrong with the ownership profile of MediaQuest as a holding company. But is it not about time PLDT made full disclosure of the personalities behind MediaQuest, which should not even have a foreigner among its owners because it owns media entities?
Is MediaQuest a stock corporation?
Due Diligencer is posing the question because in a filing, PLDT said “its investments include common shares of stocks of various communication, broadcasting and media entities.” “Its” refers to MediaQuest.
Who “are” they behind the Beneficial Trust Fund? Would MediaQuest alone—meaning without the backing of “the Board of Trustees of the Beneficial Trust Fund” identified with PLDT, be able to exist by itself?
Again, there are more questions that would haunt MediaQuest. For instance, would its PDRs attract foreigners without “the Board of Trustees’ imprimatur on MediaQuest’s P6-billion PDRs?
Who are then the members of the “Board of Trustees”?
It is easy to go around the ownership law that does not allow foreigners to own shares in media ventures. Foreign ownership participation could be hidden under layers of ownerships such as the 60-40 percent in favor of Filipinos, a ratio that has become a traditional policy implemented by the SEC.
Ever heard of a 60-40 percent owned company being treated like 100-percent Filipino-owned when investing in it? Perhaps, this may be happening only in the Philippines because no one has questioned such policy in computing the final ownership of a stock corporation.
If the sale/issuance of PDRs to foreigners is not a violation of the ownership law, the SEC should be able to define for the public what kind of securities PDRs are when issuers allocate “underlying shares” to cover their eventual conversion to common stocks?
Finally, why should media entities such as MediaQuest, ABS-CBN and GMA Network float PDRs for foreigners? Are there not enough Filipino investors who could afford to buy or subscribe to additional issues of common and preferred shares?