Court denies GMA push vs SEC term rule
A Makati court has rejected the petition of GMA Network Inc. to suspend a Securities and Exchange Commission (SEC) rule imposing term limits on independent directors.
In a statement on Tuesday, the SEC said Branch 38 of the Makati Regional Trial Court had denied GMA’s application for a temporary restraining order (TRO) against Memorandum Circular No. 7, Series of 2026.
The circular caps the cumulative term of independent directors in the same company at nine years, counted from 2012.
After reaching the limit, directors may no longer serve as independent directors but can still be elected as regular board members.
GMA filed a petition for certiorari on March 26 seeking to nullify the rule, along with an urgent request for a TRO and a writ of preliminary injunction.
The SEC opposed the application, arguing that GMA had failed to establish a clear and unmistakable right that was violated by the implementation of the circular.
The regulator, through the Office of the Solicitor General, also noted that GMA had already disclosed to the Philippine Stock Exchange that it had moved its annual stockholders’ meeting from May 20 to Dec. 9.
According to the court, this undermined the company’s claim of urgency, as it had sufficient time to comply with the new requirements.
The court further cited indications that the rescheduling of the meeting had not been fully disclosed during proceedings, which may have misled the court on the urgency of the petition.
With no “extreme urgency” established, the court said GMA now has adequate time to vet independent directors in line with SEC regulations.
The SEC maintained that the policy aligns with efforts to strengthen corporate governance, improve investor confidence and deepen capital market development.
Citing the Revised Corporation Code, the regulator said it is empowered to set qualifications, term limits and other requirements for independent directors to align with global standards.
SEC Chair Francis Lim earlier stressed the need to curb boardroom entrenchment and raise governance standards to support the country’s capital markets.
“We must raise our governance standards to restore investor confidence. Our stock market has been falling behind. The time to act is now, and we call on everyone to step up for the sake of our capital markets,” Lim added.
