PLDT reiterates no fraud uncovered in P48-B budget ‘overrun,’ cooperates with regulators’ probes

Pangilinan-led PLDT Inc. on Wednesday reiterated that its internal probe on the P48-billion capital expenditure overrun or budget overspend has not uncovered fraud as it cooperates with the inquiries being conducted by capital markets regulators.

“PLDT has not unearthed fraudulent activities in relation to the capex overrun. It will make the necessary disclosures if this changes in the future,” the telco said in a disclosure to the Philippine Stock Exchange (PSE).

“Furthermore, the business and the outlook for the business continue to remain healthy,” it added.

Last Friday, PLDT announced it was investigating an estimated P48-billion worth of capital expenditure overrun or unexpected incurred budget costs over the period of four years (2019 to 2022), which triggered a management reorganization within the company.

The telco, however, said that its investigation has, so far, not uncovered any fraudulent transactions, procurement anomalies, or loss of assets arising from the capex overspend.

The budget overrun issue prompted the Securities and Exchange Commission (SEC) to order an inquiry into the trading activities on PLDT Inc. after a selloff reportedly happened before the company disclosed the development.

The SEC ordered the PSE and the Capital Markets Integrity Corporation (CMIC) to provide initial reports of the trading activities on PLDT Inc.

PLDT said it is cooperating and will continue to cooperate fully with the SEC, PSE, and CMIC “in relation to their inquiry into PLDT’s elevated capex spend subject of its disclosure to the PSE on December 16, 2022, as well as their investigation into the trading activities on PLDT shares just before the disclosure was filed with the PSE.”

The telco said it has responded to separate requests for clarifications and answers from SEC and PSE, and will continue to respond promptly to any further requests.

The SEC said the initial reports of the PSE and CMIC would cover the trading activities which resulted in the “sudden and sharp” decline in the share prices of PLDT prior to the official disclosure regarding the “budget overruns.”

“The company is also gathering all the information requested by CMIC,” PLDT said.

“As a listed company, PLDT has an obligation to make timely disclosures,” the telco added.

The CMIC serves as the independent audit, surveillance, and compliance arm of the PSE, tasked to enforce the Securities Regulation Code.

Its powers include investigating and resolving violations by trading participants of the securities law, along with trading-related irregularities and unusual trading activities involving issuers.

Shares in the company have since fallen by double digits, closing Monday at P1,192.00 apiece or down by P286.00 or 19.35% from last Friday’s finish of P1,478 per share.

“Even as there were rumors circulating about PLDT in the public domain, PLDT needed to understand the range of issues involved and the extent of the matter,” the telco said.

“Until this information is complete, any announcement would have been premature to the detriment of the public shareholders,” it added.

PLDT said that last Friday’s disclosure was done not one day sooner because it needed time to conduct its investigation of the contracts and expenditures involved as well as to meet its major vendors for reconciliation of outstanding amounts and project status.

“It also needed to identify and indicate in the disclosure its action plan moving forward,” the telco said.

Despite the budget overrun, PLDT has said that all three of its major revenue streams — wireless, home, and enterprise — “remain healthy and robust.”

“These three business units are unaffected by the CAPEX overrun,” it said.

CFO not suspended

In another disclosure, PLDT denied reports that its chief finance officer Annabelle Chua had been suspended.

“Ms. Anabelle L. Chua has not been suspended from the company. She is on leave with pay to allow the company to conduct an independent investigation into the elevated capex spend, but she has made herself available to the company to answer questions or provide clarifications as needed,” the telco said.

As of end-September this year, PLDT booked a core telco income of P25.4 billion, up 10% year-on-year.

For the entire 2022, the company is targeting a core telco income of P33 billion.

Investors’ briefing

On Friday, PLDT conducted a special briefing to its investors and analysts to  discuss matters concerning the P48-billion budget overspend in Makati City.

PLDT Corporate Communications head Cathy Yang told reporters that details of what transpired during the special briefing cannot be disclosed to the public yet.

In a chance encounter with reporters, PLDT Consumer Business-Home head Jeremiah de la Cruz also refused to divulge details but said that “we’re working together as one team.” —AOL/NB, GMA Integrated News