Manuel V. Pangilinan
PLDT Inc. and its top executives, including Manuel V. Pangilinan, are facing class action lawsuits in the United States arising from the P48-billion budget mess, which disgruntled investors blame for the drop in the telco giant’s share prices that in turn caused trading losses.
In a document obtained by the Inquirer, investor Sophia Olsson filed on behalf of other plaintiffs—which can be “hundreds, if not thousands”—the case in the US District Court, Central District of California this week.
Olsson and the other investors—who purchased PLDT securities between Jan. 1, 2019 and Dec. 19, 2022, referred to as the class period or time when the alleged crime transpired—are represented by The Rosen Law Firm, P.A.
Law firms Bernsteid Liebhard LLP and Robbins LLP likewise filed class action suits, according to their separate notices.
The plaintiffs, led by Olsson, are demanding compensation for damages the defendants allegedly caused upon them due to violations of federal securities laws, which have yet to be proven.
PLDT and its officials allegedly “misrepresented and failed to disclose the following adverse facts pertaining to the company’s business, operations and prospects, which were known to defendants or recklessly disregarded by them,” the plaintiffs said.
The plaintiffs noted that press releases related to capital expenditure and other spending during the four-year class period did not include the budget snafu until December last year.
The court filing cited numerous reports from 2019 to 2022 to back the claim.
On Dec. 16, 2022, PLDT disclosed that it had incurred billions-worth of budget overrun from 2019 up to last year due to “over orders” related to rollout of 5G and wireless services, among others. The adoption of the fast-speed technology did not take off as expected as shown by the low 5G penetration in the market, the Pangilinan-led telco explained earlier.
“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s common shares, plaintiff and other class members have suffered significant losses and damages,” according to the court filing.
It was previously reported that PLDT American Depository Receipts dropped by more than 23 percent on Dec. 19 following the budget overrun disclosure. On the same day, PLDT shares traded via the local bourse plummeted by nearly 20 percent to P1,192 each, wiping out around P62 billion in shareholders’ value.
Inquirer reached out to the telco giant for comments about the law suits but have yet to receive a response.
Since the budget debacle has emerged, PLDT said it has been conducting an investigation to get to the bottom of the issue. But it had stressed that no fraudulent activities were uncovered so far.
The telco player is negotiating with vendors to slash their obligations, in addition to seeking for payment deferral, to mitigate the impact of the overspending on their bottom-line.
PLDT is also set to scale down its capital outlays this year. In 2022, it earmarked P85 billion in capital expenditure.
The Pangilinan-led company previously announced plans to borrow about P35 billion to P45 billion in the next two years to fund its capex, dividends and general corporate matters.