GMA Network files petition vs SEC rule on independent directors

GMA NETWORK, Inc. said it has filed a petition before a Makati court seeking to nullify a Securities and Exchange Commission (SEC) rule imposing a nine-year term limit on independent directors of publicly listed companies.

In a disclosure, the company said it filed a petition for certiorari before the Makati Regional Trial Court on March 26, seeking to set aside the regulator’s memorandum.

“The Petition seeks to nullify and set aside SEC MC Circular 7, s. 2026 for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction and for being violative of Sections 1 and 22 of Article III of the 1987 Constitution,” it said.

The listed media company said it is also seeking a temporary restraining order from the court to suspend the implementation of the rule while the case is pending.

“By the Petition, petitioner GMA assails the constitutionality of SEC MC Circular 7, s. 2026 and asserts to sustain direct injury by virtue of the issuance of the assailed Circular for the very limited time afforded to it before the holding of its 2026 Annual Stockholders Meeting,” GMA Network said, adding that due to the SEC’s memorandum it will be forced to replace two of its incumbent independent directors, namely, Artemio V. Panganiban and Jaime C. Laya, without the opportunity of conducting an exhaustive vetting process.

SEC Memorandum Circular No. 7, signed by SEC Chairperson Francisco Ed. Lim on Jan. 26, states that an independent director is elected for a one-year term and may serve for a maximum cumulative term of nine years in the same listed company.

The circular took effect on Feb. 1. Under the memorandum, independent directors elected before its effectivity are also covered by the nine-year limit, counted starting calendar year 2012. — Ashley Erika O. Jose