PLDT out to nip US legal battle in the bud
MANILA, Philippines — PLDT Inc. aims to nip a potential class action suit in the bud by reaching out to US-based law firms that had expressed intent to probe if the telco giant violated federal securities law in relation to its P48-billion budget overrun.
Manuel V. Pangilinan, chair of the telco giant, said during their recent special briefing they were aware of the possible legal battle the company was facing after it disclosed its overspending on capital outlays in the past four years.
“We have received reports that there’s a law firm … threatening to launch a class action suit against the company because of our US listings,” Pangilinan said.
“But we are now in conversation with these lawyers in respect to this potential threat to the company,” he added.
Inquirer reported recently that several US law firms—Glancy Prongay & Murray LLP, The Schall Law Firm, Johnson Fistel LLP and Law Offices of Howard G. Smith—were keen to investigate PLDT for possible federal securities law violations on behalf of investors.
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These law firms are reaching out to investors for a potential class action suit after PLDT American Depositary Receipts dropped by more than 23 percent on Dec. 19 following the budget overrun disclosure.
Article continues after this advertisementThe Schall Law Firm said the probe would focus on “whether the company issued false and/or misleading statements and/or failed to disclose information pertinent to investors.”
The Pangilinan-led company is investigating the budget mess but assured investors that it had so far found no fraudulent activities. It attributed the additional spending on “over orders” of key network gear as it builds up 5G infrastructure.
PLDT had to store some of the 5G assets in the warehouses as it slowed down on deployment given the low market penetration.
The telco player is also negotiating with vendors to slash their obligations, in addition to seeking payment deferral, to mitigate the impact of the overspending on their bottom line.
Beginning next year, PLDT president and CEO Alfredo Panlilio also said they would cut their capital outlays.
“Thereafter, we expect capex to reduce steadily. 2023 will be a year of consolidation as we continue to strengthen and grow the business,” he earlier said.
PLDT also announced plans to borrow about P35 to P45 billion in the next two years to fund its capex, dividends and general corporate matters.
On Friday, PLDT shares fell by 1.52 percent, or P19, to close at P1,230 each.
