Plaintiffs in US suits vs PLDT contested
MANILA -Telco giant PLDT Inc. is asking for the rejection of investors Sophia Olsson and Kevin Douglas’ appointment as lead plaintiffs in separate class action suits filed in the United States relating to its multi-billion budget overrun, which triggered trading losses when it was revealed a few months ago.
In a disclosure on Monday, the telco giant contested the participation of Olsson and Douglas as the class leaders of the lawsuits against PLDT as they “lack sufficient financial interest in the outcome” of the lawsuits, which were filed after the company disclosed its budget overspending in December.
The listed company noted that Olsson claimed to have lost $22.69 while Douglas said he incurred a $240.23-loss following the announcement.
PLDT American Depositary Receipts fell by more than 23 percent on Dec. 19 following the disclosure on Dec. 16 about the capital expenditure overspending. 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 company asserted that the movants (Olsson and Douglas) failed to establish that they are appropriate lead plaintiffs in the US class action given that under the Private Securities Litigation Reform Act, lawsuits by shareholders with a small position in the security issue are discouraged,” PLDT explained.
Plea denial
“Thus, the company argued in its memorandum that the movants’ motions for appointment as lead plaintiff should be denied,” it added.
According to the telco giant, a hearing for the appointment of the lead plaintiff is scheduled on May 8.
Olsson and Douglas are represented by The Rosen Law Firm and Levi & Korsinsky LLP, respectively.
In February, the Inquirer reported that Olsson filed on behalf of other plaintiffs their lawsuit in the US District Court, Central District of California. The investors are demanding compensation for damages the defendants allegedly caused upon them due to violations of federal securities laws, which have yet to be proven.
The accumulated overspending started in 2019, covering four years in total, before it was uncovered just last December 2022, according to the PLDT. The company recently said that the P48-billion budget mess was brought down to P33 billion after concluding negotiations with major suppliers.
The Pangilinan-led company stressed that no evidence of fraud was detected during the forensic review of the budget overrun. It has also put in place tighter controls, such as improvement in the project management system, to prevent another major financial debacle. INQ
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