3rd telco bidder eyes suit vs DICT head
Listed NOW Corp. sought to blame the wild swings in its share price, notably the steep decline of last week, on public statements issued by Eliseo Rio Jr., acting Secretary of the Department of Information and Communications Technology.
In a statement on Monday, NOW Corp. investor relations head Miguel Lopez said the company’s lawyers were studying “possible legal recourses” against the DICT chief. The company did not specify what charges might be filed.
This was in reaction to the statement issued last week by Rio a day after a legal case was filed by NOW Corp. affiliate NOW Telecom on Oct. 8 against the National Telecommunications Commission’s third telco selection rules.
NOW Telecom, in particular, challenged key aspects of the rules such as the frequencies to be included and the hefty performance and participation bonds required by the NTC. The bonds were included to ensure that a third telco delivers on its commitments to the government and the public, the DICT had said.
The latest legal threat was aimed at the statement issued by Rio after trading hours on Oct. 9. In that statement, the DICT secretary suggested that NOW Corp. was delaying the third telco selection process and that it likely lacked the financial resources to compete.
Rio made the comments after NOW Corp. issued its first public statement on NOW Telecom’s lawsuit during the afternoon trading session of Oct. 9.
Major media outlets first carried the news of the court filing and Rio’s statement on Oct. 10, triggering a two-day 40-percent decline in NOW Corp.’s share price.
NOW Corp., whose share price soared to record highs earlier this year on the back of its plans to join the third telco selection process, pinned the blame on the DICT’s statement, saying that billions of pesos in market value were lost. As of Monday, NOW Corp. was still trading lower by 22.6 percent since before the news was first published.
NOW Corp. took exception to Rio’s comments on the company’s financial capacity and that it was the mother company of NOW Telecom.
“NOW Telecom is only an affiliate of NOW Corp.,” Lopez said, adding that NOW Corp. has a 19-percent stake in NOW Telecom, where NOW Corp. CEO Mel Velarde sits as vice chair and chair of the executive committee, information on its website showed.
In an interview with reporters on Monday, Rio countered that it was NOW’s investors who were punishing the company for its actions and not his statements.
None of the other prospective bidders who bought the P1-million bid documents complained about the selection process rules.
