• GMA dropped its court challenge against the SEC’s new nine-year limit for independent directors.
• The dispute centered on former chief justice Artemio Panganiban and former BSP governor Jaime Laya, who have each served on GMA’s board for 18 years.
• While GMA fought the rule in court, firms including PLDT, Petron, Puregold and Shell Pilipinas complied with the SEC reform.
TV giant GMA Network has abandoned its court challenge against the Securities and Exchange Commission’s stricter board tenure rules, ending a legal fight that sought to preserve two of its longest-serving independent directors.
The dispute centered on the SEC’s new nine-year cumulative term limit for independent directors, a reform designed to strengthen board independence at publicly listed companies.
GMA stood out among listed firms in resisting the policy, even as PLDT Inc., Petron Corp., Puregold Price Club, Inc. and Shell Pilipinas Corp. complied with the new requirements.
Two board veterans at center
At the center of the dispute were former chief justice Artemio Panganiban and former Bangko Sentral ng Pilipinas governor Jaime Laya, who have each served on GMA’s board for 18 years, double the SEC’s prescribed limit.
GMA had argued that replacing the two independent directors could take three to five years of vetting and succession planning.
The SEC countered that the company was resisting a “necessary corporate evolution” and said investor protection outweighed the administrative burden of finding new directors.
Court setback and next steps
In May, the Makati Regional Trial Court denied GMA’s request for a preliminary injunction, ruling that the network failed to demonstrate the urgent and irreparable harm needed to stop enforcement of the circular.
GMA’s stockholders will instead meet on July 17 after the SEC rejected the company’s bid to postpone its annual meeting to December.
The broadcaster did not disclose why it decided to withdraw the petition.
—Edited by Miguel R. Camus
