House Bill No. 7332 renewing the franchise of Dito Telecommunity has just passed second reading in the Senate. It will just be a matter of time that the Bill will be approved by Congress and signed into law.
Section 12 of the Bill provides that the grantee shall not sell, lease, transfer, grant the usufruct of, nor assign the franchise or the rights and privileges acquired thereunder to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other corporation or entity, nor the controlling Interest of the grantee be transferred, simultaneously or contemporaneously, to any person, firm, company, corporation, or entity without the prior approval of the Congress of the Philippines. The measure prohibits Dito Telecommunity to lease, transfer, sell, grant the usufruct, or assign the franchise, rights or privileges, or its controlling interest WITHOUT prior Congress approval.
Likewise, Section 13 of the Bill requires the company to offer at least 30% of its outstanding stock to Filipino citizens in any security exchange in the Philippines or through other methods encouraging public participation within five years from the effectivity of the law granting the franchise.
The mandate to offer at least 30% of its outstanding stock to Filipinos in any security exchange may force the third telco, to float and offer shares directly in the stock exchange instead of using DITO as back-door entity. Using DITO as a back-door listing entity may constitute a violation of Section 12 of the franchise law prohibiting the transfer of controlling interest in Dito Telecommunity.
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