“For Lopez, the only way to preserve any remaining enterprise value is through a comprehensive forensic audit and the replacement of current management before the corporation’s assets are irrevocably dissipated”
WHILE the public has long focused on the loss of its broadcasting franchise, a far more alarming drama is unfolding within the Audited Financial Statements (AFS) of ABS-CBN Corporation.
A Verified Complaint recently filed with the Securities and Exchange Commission (SEC) by board member Federico “Piki” Lopez alleges that behind the scenes, management has been engaged in a “systemic scheme” to manipulate revenues and manufacture an “illusion of solvency” through deceptive accounting maneuvers.
The complaint, which names Chairman Martin Lopez, CEO Carlo Katigbak, and CFO Ricardo Tan, Jr. as respondents, calls for the urgent appointment of an Interim Management Committee (IMC) to halt the “continuing dissipation, wastage, and destruction” of corporate assets that has pushed the network toward “inevitable insolvency”.
At the heart of these allegations is the use of “phantom” dividends—a scheme where subsidiaries record paper gains to declare massive dividends back to the parent company.
This process creates artificial income to mask a dire reality: between 2019 and 2025, ABS-CBN accumulated ₱45.5 billion in net losses, completely wiping out a once-healthy ₱13.8 billion in retained earnings and leaving a ₱6.0 billion deficit.
The case of The Big Dipper Digital Content & Design, Inc. serves as a primary exhibit of this “creative booking.” In 2022,
Big Dipper recognized ₱1.19 billion in unrealized foreign exchange gains, largely from receivables owed to it by its own parent company. This paper gain allowed Big Dipper to declare a ₱2.5 billion cash dividend to ABS-CBN.
However, at the time of declaration, Big Dipper’s actual cash balance was a mere ₱1.83 million.
To settle the multi-billion-peso dividend, the subsidiary simply “offset” the amount against the debt ABS-CBN already owed them, inflating the parent’s income by ₱2.5 billion without any actual cash changing hands.
A similar maneuver allegedly occurred with ABS-CBN Global Hungary Kft. In 2025, it declared a dividend of approximately ₱3.63 billion, which ABS-CBN booked as “Other Income,” accounting for roughly 40% of the parent company’s revenue that year.
Yet, only ₱29.1 million was actually received in cash, with the ₱3.6 billion balance settled through a non-cash loan assignment.
Most damningly, Hungarian auditors issued “Qualified Opinions” and “Disclaimers of Opinion” because these subsidiaries failed to provide evidence for their valuations.
These material red flags were allegedly “whitewashed” and omitted from ABS-CBN’s consolidated reports to delude the investing public.
This financial mirage was further compounded by a massive “black hole” of financial impairments.
In the last six years, ABS-CBN has written off ₱16.04 billion in investments.
Sky Cable alone reported ₱6.4 billion in impairment losses between 2023 and 2025 following a “fire sale” of assets.
Lopez argues there is “serious doubt” whether these funds were ever used for legitimate growth or were simply a means to further drain the corporation’s coffers.
The staggering contrast lies in the payouts: while the company faced “material uncertainty” as a going concern, it disbursed ₱10.6 billion in compensation and advances to management and officers between 2020 and 2025.
To hide this, management reportedly reclassified bonuses into “guaranteed salaries” to report a zero balance for bonuses in annual reports starting in 2021.
Furthermore, the complaint highlights the irregular purchase of ₱12.1 billion in plant property and equipment between 2020 and 2025—an expenditure made despite the network’s lack of a broadcasting franchise.
Lopez argues this massive sum alone could have turned the company’s finances around, yet it remains clouded by reporting discrepancies, such as a 2020 cash outlay that was inexplicably reduced from ₱4.3 billion to ₱3.0 billion in subsequent filings.
This cycle of “irrational squandering” is the direct reason why Piki Lopez has taken the extraordinary step of opposing a new ₱2 billion funding infusion, alleging that more than half is already earmarked for the Top 5 Officers rather than stabilizing the network.
For Lopez, the only way to preserve any remaining enterprise value is through a comprehensive forensic audit and the replacement of current management before the corporation’s assets are irrevocably dissipated.
(Email: ernhil@yahoo.com)
