(Eagle News) – ABS CBN Corporation and TV5 Network Inc., said that they have “mutually agreed to terminate” the investment agreement dated August 10, 2022 that covered the proposed acquisition by ABS- CBN of 34.99 percent equity interest in TV5.
In a statement, both media companies also announced the termination of the “Convertible Note Agreement” dated August 10, 2022 that covered the “proposed subscription by ABS-CBN to a Convertible Note to be issued by TV5.”
“The termination was also formalized through a Memorandum of Agreement. The Parties confirmed that they have not implemented any of the transactions covered by the Investment Agreement and the Convertible Note Agreement,” said the statement by ABS-CBN Corp., on the deal’s termination.
The termination of the investment deal was disclosed to the Philippine Stock Exchange the Securities and Exchange Commission on Thursday, September 1, 2022.
In another disclosure to both the PSE and the SEC also on Thursday, “Sky Vision Corporation (“Sky Vision”), ABS-CBN Corporation, Lopez, Inc., and Cignal Cable Corporation (“Cignal Cable”) announced that they have mutually agreed to terminate the Sale and Purchase Agreement” dated August 10, 2022 that covered the proposed acquisition by Cignal Cable of 38.88% equity interest in Sky Cable Corporation.
Likewise, the “Debt Instruments Agreement” dated August 10, 2022 covering the proposed subscription by Cignal Cable to an Exchangeable Debt Instrument to be issued by Sky Vision, as well as the proposed acquisition by Cignal Cable of a Convertible Note issued by Sky Cable, was also terminated.
“The termination was formalized through a Memorandum of Agreement. The Parties confirmed that they have not implemented any of the transactions covered by the Sale and Purchase Agreement and the Debt Instruments Agreement,” ABS-CBN said in a statement announcing the said termination.
-Deal terminated after House starts probe-
The termination of the deals involving ABS-CBN and its subsidiary Sky Vision came about after the House of Representatives started an investigation on the alleged violations committed by the companies involved in the deal.
SAGIP Party List Rep. Rodante Marcoleta said that the partnership between ABS-CBN Corp., was a “circumvention of the law” and have also asked the National Telecommunications Commission (NTC) and the Philippine Competition Commission to look into the deal.
In a privilege speech on August 15, Marcoleta said that the deal also violated the franchise of TV5.
“With the substantial purchase, Mr. Speaker, of the outstanding stocks of ABS-CBN, I believe Section 5 of the franchise of TV5 was violated because the rights and obligations have virtually been transferred to ABS-CBN,” Marcoleta said.
The solon said that ABS CBN should first pay its obligations to the government, including fines which he said should amount to about P1 trillion.
“Pupuwede ba Mr. Speaker na ang isang network na hindi na natin binigyan ng lisensya because of this established violation, wala na siyang prangkisa, pwede ba siyang sumakay na ganun ganun lang. without settling the obligations to the country, to the government?” he asked.
(Is it possible Mr Speaker that a network which had not been given a license because of this estiablished violation. It has no franchise. Can it just ride [on a deal] just like that, without settling the obligations to the country, to the government?)
ABS CBN has been off the air since May 5, 2020 after the expiration of its franchise. In July that year, Congress, in a vote of 70-11, reject the media corporation’s franchise renewal application after finding several violations during its hearings.
During the hearings, among the issues raised were the following: the dual citizenship and alleged dual allegiance of its chairman emeritus Eugenio “Gabby” Lopez III which allegedly violated the Constitutional restriction of mass media ownership to only Filipino citizens; the alleged foreign ownership of the media network through Philippine Depositary Receipts (PDRs) bought by foreigners; its alleged tax avoidance schemes; its use of multiple channels in violation of its original franchise; the violation of labor laws with its failure to regularize its workers; and its alleged bias in reporting and meddling in politics.
(Eagle News Service)