A MAKATI court has denied a GMA Network Inc. petition seeking to temporarily stop implementation of a Securities and Exchange Commission (SEC) rule imposing term limits on independent directors of listed firms.
Branch 38 of the Makati Regional Trial Court rejected the network’s application for a temporary restraining order (TRO) against SEC Memorandum Circular 7, Series of 2026.
The directive, which took effect on Feb. 1, sets a maximum cumulative term of nine years for independent directors in the same company, reckoned from 2012.
After reaching the limit, directors may no longer serve as independent directors but may still be elected as regular board members.
GMA filed a petition for certiorari on March 26 seeking to nullify the circular, arguing that immediate relief was needed ahead of its annual stockholders’ meeting (ASM), originally scheduled in May.
The SEC, through the Office of the Solicitor General, opposed the application, saying the company failed to demonstrate a clear and unmistakable right that would justify the issuance of a TRO.
The regulator also pointed out that GMA had already disclosed to the Philippine Stock Exchange (PSE) that it had rescheduled its ASM from May 20 to Dec. 9, undermining its claim of urgency.
During the hearing, the court noted that the rescheduling was not clearly disclosed in the petition, creating the impression of urgency and amounting to an apparent concealment that misled the court.
As a result, the RTC ruled that no “extreme urgency” existed, noting that the company now had sufficient time to comply with the new rules and vet qualified independent directors.
The commission maintained that the circular was aligned with efforts to strengthen corporate governance and boost investor confidence, citing provisions under the Revised Corporation Code that empower the regulator to set qualifications and term limits for independent directors in line with global standards.
SEC Chairman Francis Lim has emphasized the need to prevent boardroom entrenchment and raise governance standards to support capital market development.
