ABS-CBN defends board oversight amid SEC probe

MANILA, Philippines — ABS-CBN Corp. has maintained that the company’s board of directors and committees have consistently exercised proper oversight of executive compensation, capital expenditures and financial reporting in accordance with applicable laws as the Securities and Exchange Commission (SEC) starts its probe on a complaint filed by tycoon Federico “Piki” Lopez against its executives.

The company also said that it has at all times complied with its disclosure obligations to the SEC and the Philippine Stock Exchange.

However, ABS-CBN said it cannot comment further on the matter as it is being actively considered by an administrative body.

The SEC has ordered ABS-CBN, some of its key officers and a subsidiary corporation to file their verified answer to Piki’s complaint within 30 days from receipt of the summons.

A complaint to the SEC was filed by Piki on May 6 against ABS-CBN, The Big Dipper Digital Content & Design Inc., chairman Martin Lopez, president Carlo Katigbak and treasurer and group chief financial officer Ricardo Tan Jr.

ABS-CBN has committed to address all allegations through the proper legal and regulatory channels, noting that the company and the named officers are currently reviewing the complaint with legal counsel.

It said the appropriate response will be filed within the period prescribed by the SEC.

In the meantime, ABS-CBN said the company’s operations continue normally and the company remains committed to its employees, content partners, advertisers and the viewing public.

“ABS-CBN will not allow this matter to distract from its mission of serving Filipino audiences,” it said.

Piki’s complaint to the SEC seeks an urgent investigation into the alleged “systemic fraud, misrepresentation and unabated dissipation” of assets by the company’s top management.

Piki, a member of ABS-CBN’s board of directors, has asked the commission to audit ABS-CBN and investigate its top management for allegedly “squandering tens of billions of pesos of the losing media company’s resources” as well as for violations of the Revised Corporation Code and the Securities Regulation Code.”

Piki claims that the actions of the ABS-CBN management “reveal a concerning pattern where a significant amount of corporate funds were disbursed in recent years to unduly favor certain officers of the corporation, and/or to siphon cash out of the corporation through unnecessary expenses.”

He said the expenses “are clearly causing damage and prejudice to the rank-and-file employees, minority shareholders, the creditors and the investing public.”

“In a flagrant display of bad faith and/or gross negligence, ABS-CBN has continuously paid exorbitant amounts of money to management and other corporate officers booked as ‘compensation packages’ or ‘advances’ amidst billions in net losses,” the complaint said.

Piki wants the SEC to probe the P3.18 billion released by ABS-CBN as payment to its top company officials and “favored persons” from 2020 to 2025.

His complaint estimated that the compensation and advances to officers, managers and other individuals would reach P10.6 billion, or 23.38 percent of the accumulated losses, during the same period.