The Securities and Exchange Commission (SEC) has ordered ABS-CBN Corporation, its digital subsidiary, and its top executives to respond to a pending complaint within 30 days, the media company announced on Monday.
The regulatory order directs ABS-CBN, Big Dipper Digital Content & Design Inc., along with Chairman Mark Lopez, President and CEO Carlo Katigbak, and CFO Ricardo Tan Jr. to submit a verified answer to the allegations.
In a regulatory disclosure filed with the stock exchange, the media network confirmed receipt of the order.
“The respondents will respond to the complaint through the proper legal channels in accordance with the applicable laws and rules, in due course,” the network stated.
The SEC’s directive stems from a May 6 complaint alleging violations of the Revised Corporation Code and the Securities Regulation Code. In response to the filing, the corporate regulator has formed an ad hoc committee to probe the operations of the Lopez Group of Companies.
The internal legal battle was launched by Federico “Piki” Lopez, an ABS-CBN director and president of Lopez Inc. According to the complaint, management approved billions of pesos in capital expenses, executive compensation, and cash advances despite severe financial losses. These losses followed the House of Representatives’ 2020 decision to deny the network’s legislative franchise renewal.
Furthermore, the complaint questions several transactions between ABS-CBN and Big Dipper, alleging that the deals were utilized to artificially boost the parent firm’s financial status.
Piki Lopez has also petitioned the SEC to appoint an independent management committee to oversee operations, protect the company’s remaining assets, and conduct a forensic audit of its financial reports and inter-company dealings.