Embattled PLDT Inc. said the surge in investments that bloated its budget by P48 billion over four years was caused by “over orders” of key network gear during the pandemic and it was now in negotiations with vendors for payment deferrals to lower expenses.
PLDT executives, led by chair Manuel V. Pangilinan, CEO Al Panlilio, and chief legal counsel Marilyn Victorio-Aquino, briefed stockbrokers and analysts during about an hour and a half closed-door session in a Makati City hotel on Wednesday.
Reporters who were in the venue were barred from covering the event.
Part of the agenda was to assure the market that no instance of fraud had been detected in the budget debacle, whose revelations late Friday caused the telco giant’s shares to plummet by nearly 20 percent on Monday.
PLDT shares have recovered some of those losses, bouncing back over 5 percent on Wednesday.
One analyst told the Inquirer the PLDT executives were calm and answered nearly all of their questions, even taking queries from participants who were viewing the meeting remotely.
The PLDT officials also stressed that part of the overspending was due to over orders of 5G and 4G network equipment in 2020 and 2021. Some of the hardware had been delivered and paid while the rest were still “in progress.”
The spending surge was in response to the soaring of demand during the lockdowns and the expansion of competitors such as DITO Telecommunity and Converge ICT Solutions.
“There may have been lapses in management that resulted in the budget overrun but we feel, so far, there was nothing fraudulent, based on their responses,” the analyst said.
Pangilinan earlier said key executives, including the head of finance, had been suspended but PLDT said in a disclosure on Wednesday that chief financial officer Anabelle Chua was merely “on leave with pay to allow the company to conduct an independent investigation.”
Another analyst told the Inquirer the telco giant was seeking payment deferrals with no interest with the involved principal vendors.
Still, the analyst said PLDT’s depreciation and financing costs were expected to be elevated until 2024.
In an earlier interview with the Inquirer, Pangilinan said the initial budget overrun estimate reached as much as P130 billion.
“We are working together as one team,” PLDT senior vice president Jeremiah M. De La Cruz told reporters on the sidelines of the briefing.
Other officials declined to give a statement following the meeting.
Meanwhile, Philippine Stock Exchange president Ramon Monzon said in a television interview with ANC on Wednesday they found no evidence of insider trading after an initial investigation.
He said the probe was ongoing and they had expanded the scope to cover PLDT’s trading history going back to the start of November this year.
Monzon told the Inquirer they were also looking at potential disclosure violations on the part of PLDT.
“I think MVP [Pangilinan] seems to be on top of it and has been forthright about this,” Monzon said.
In a disclosure on Friday, PLDT said it was coordinating with the Securities and Exchange Commission (SEC), the PSE and the Capital Markets Integrity Corp. (CMIC) in their inquiry into its budget overrun.
It also expressed cooperation for the probe into suspicious trading activities on PLDT shares.
Prior to disclosing the “budget overrun” issue on Friday, a heavy sell-off of PLDT shares was observed, triggering an investigation by the said regulators.
“PLDT has responded to separate requests for clarifications and answers from SEC and PSE, and will continue to respond promptly to any further requests. The company is also gathering all the information requested by CMIC,” the Pangilinan-led company said in a disclosure on Wednesday.
The telco giant reiterated no fraudulent activities were found yet in relation to the additional capital expenditure (capex).
PLDT previously said the capex was allocated to LTE and 5G rollout, Fiber-to-the-home investments, fiber, submarine cable expansion and tower upgrades.
The telco also said the Friday disclosure was just on time, explaining they had to “understand the range of issues involved and the extent of the matter” first.
“Until this information is complete, any announcement would have been premature to the detriment of the public shareholders,” PLDT said.
“Last Friday’s disclosure was done not one day sooner because PLDT 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 added. INQ