PLDT faces more PSE scrutiny over P 48-B budget overspend

Manuel V. Pangilinan

PLDT Inc. stressed that an internal audit triggered by the recent discovery of P48 billion in overspending in the last four years was still ongoing as the embattled telco giant faces scrutiny over its regulatory disclosures to the public.

The company also played down and denied parts of an exclusive interview PLDT chair Manuel V. Pangilinan (MVP) gave to the Inquirer, where he admitted to lapses in their supposed budget overruns that came amid surging expenses during the pandemic.

“The company denies the veracity of the statements attributed to Mr. Pangilinan made in relation to ‘unrecorded transactions’ or ‘undocumented purchase orders,’” PLDT said in a Philippine Stock Exchange (PSE) filing on Tuesday.

The Inquirer, however, stands by the report, which was first published a day after the company made its initial disclosure on the budget overruns on Dec. 16.

Violent drop

The overspending revelations and manner of disclosure led to a violent drop in the company’s share price the following Monday, analysts told the Inquirer.

This latest filing comes as PLDT faces queries from the PSE, which is also looking at the company’s public filings for inconsistencies with pronouncements made by Pangilinan in the interview.

“The disclosure on capex (capital spending) did not mention any unrecorded transactions. The discussions/negotiations with the relevant suppliers and vendors are still ongoing. The ongoing discussion with the vendors referred to in the disclosure on capex spend will provide us more information and basis to determine the appropriate treatment of the P48 billion on our books,” PLDT said.

On Tuesday, minority investor protection group Shareholders’ Association of the Philippines (SharePHIL) also expressed “deep concern over the recent news surrounding PLDT.”

“This development has resulted in a sudden and sharp decline in the company’s market price over the past week, causing some apprehension among shareholders,” it said in a statement.

“We trust that PLDT will take the necessary measures to uphold their values of transparency, accountability, and integrity,” the group said.

It also urged PLDT and other publicly listed companies to advance minority shareholder rights “through the fair and equitable access to information, similar to the privilege given to institutional investors.”

“Given PLDT’s commitment to good corporate governance, we call on them to ensure that their minority shareholders are given the same level of treatment and consideration as all of their other stakeholders during this process,” it said.

Meanwhile, PLDT insisted on Tuesday it found no fraud or anomalies so far during its investigation.

“For clarity, the forensic investigation is still ongoing. Thus far, no fraudulent transaction, procurement anomaly, or loss has been identified or uncovered,” it said.

PLDT also confirmed other parts of the Inquirer interview, including the discovery of billions of pesos in questionable transactions in October this yea and the subsequent internal probe, with the assistance of an external consultant not associated with its external auditor SGV & Co.

“The investigation on elevated capex spend, which was mandated by the board and audit committee was upon the direction of Mr. Pangilinan who received information on or around October 2022 on the accumulated capex spend reflecting a total amount which is higher than the projected capex spend,” PLDT said.

“After receipt of the information and further internal verification, the company undertook an internal forensics investigation mandated by the company’s board and audit committee with the assistance of an external consultant,” it added.

PLDT also downplayed a portion of the Inquirer report stating that key company executives were suspended with pay while the investigation was underway.

[T]here are no employee suspensions. The concerned officers are on leave with pay to allow the conduct of an independent investigation on the elevated capex spend, although they have made themselves available to the company to answer questions or provide clarifications as needed,” PLDT said.

The PSE and Securities and Exchange Commission are currently conducting a comprehensive probe into the potential insider trading of PLDT shares.