To pretend they are majority Filipino-owned, PLDT and Globe fabricated cheap, so-called “voting preferred shares.” PLDT issued 150 million shares, more than half its 216 million common shares. These were not tradable and worth just P150 million, a tiny fraction of common shares’ par and market values of P1 billion and P540 billion, respectively.
Globe, way back in 2001, after Deutsche Telecom’s equity pushed foreign ownership to 54 percent, issued 159 million similar shares, even more than its 133 million common shares. These were worth P795 million, a fraction of its common shares’ par and market values of P7 billion and P320 billion, respectively.
PLDT issued these strange shares to just one entity, its Beneficial Trust Fund; in the case of Globe, to Asiacom, owned 60 percent by Ayala Corp. These two entities, therefore, were classified as Filipino corporations.
The duopoly’s trick
The duopoly’s trick has been to claim that the foreign shareholders’ percentage ownership is computed as their holdings of both common and voting preferred shares as a percentage of total common and voting preferred shares, no matter if the value of the preferred shares is a tiny fraction of the common shares.
Clear and unambiguous SC ruling
That ruling is obviously so clear and unambiguous it cannot lead to any other interpretation. And, indeed, the Securities and Exchange Commission a few weeks later, circulated to the business community for comments its draft memorandum to implement the decision. The draft was faithful to the Court’s ruling, explaining that the foreign ownership restrictions must be observed for “each class of shares.”