PLDT acknowledges US class action suit
PLDT Inc. is now aware of the class action lawsuit filed against the company in a United States court by a certain investor following its P48-billion budget fiasco but has yet to be served with the complaint, adding it has no further information about the case for now.
In a disclosure on Tuesday, the telco giant said it “has learned that a securities class action lawsuit was commenced on Feb. 6, 2023 by Sophia Olsson, a purported holder of PLDT securities, in the US federal district court.”
The Pangilinan-led company noted that the listed firm, along with its nine current and former employees, were named as defendants based on the court filing.
“The company has not been served with a copy of the complaint, as required under the US law, and does not have any further information regarding the lawsuit at this time,” PLDT added.
Last week, Inquirer reported that Olsson, on behalf of “hundreds, if not thousands” of plaintiffs, filed the lawsuit in California as they demand compensation from the losses they incurred after PLDT securities’ price drop due to the budget overrun issue.
PLDT American Depositary Receipts fell by more than 23 percent on Dec. 19 following the disclosure on Dec. 16. On the same day, PLDT shares traded via the local bourse plunged by nearly 20 percent to P1,192 each, wiping out around P62 billion in shareholders’ value.
The plaintiffs alleged the telco giant and its officials “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,” which is a potential violation of the federal securities law.
The accumulated overspending had started in 2019, covering four years in total, before it was uncovered just last December 2022, according to PLDT, which stressed before that initial investigation showed no signs of fraud.
In a disclosure on Dec. 16, 2022, the major telco player said it had incurred billions-worth of budget overrun due to “over orders” related to rollout of 5G and wireless services, among others.
This lawsuit is being handled by The Rosen Law Firm, P.A. Law firms Bernsteid Liebhard LLP and Robbins LLP also filed class action suits, according to their separate notices.
To cushion the budget overrun impact, PLDT previously said it was in talks with vendors to cut down their debts and sought for payment deferral. It is also set to borrow up to P45 billion in the next two years to fund expenditures. INQ
