PLDT offers $3-M settlement of budget overrun US class suit

MANILA, Philippines  —Telecommunication giant PLDT Inc. is ready to shell out $3 million to settle a class action suit in the United States filed by aggravated investors who claimed to have incurred losses due to the multibillion-peso budget overrun disclosed in 2022.

In a disclosure on Thursday, the Pangilinan-led company said it had entered into a stipulation of settlement with the plaintiffs on Feb. 16. This, however, is still subject to approval by the US District Court for Central District of California.

“The proposed settlement agreement contains no admission of liability, fault or wrongdoing by the defendant,” the company stressed.

“If approved by the court, the settlement will resolve the US class action in its entirety as against all defendants,” it added.

READ:  PLDT acknowledges US class action suit

Last year, certain investors filed lawsuits in California to demand compensation for the losses they had incurred from the price free fall of PLDT securities amid the P48-billion budget overrun issue.

PLDT American Depositary Receipts fell by more than 23 percent on Dec. 19, 2022, following the disclosure of the overrun on Dec. 16, 2022. On the same day, PLDT shares traded at the local bourse plunged by nearly 20 percent to P1,192 each, wiping out around P62 billion in shareholder value.

Accumulated overspending

The plaintiffs alleged that the telco giant and its officials had “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.

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

The accumulated overspending had started in 2019, covering four years in total, before it was uncovered on December 2022, according to PLDT.

The overspending, as previously reported, was due to “over orders” related to the rollout of 5G and wireless services, among others.

In March last year, PLDT wrapped up the investigation into the financial fiasco, assuring its investors that no evidence of fraud was found during the forensics review conducted by an external council.

The telco giant said it has since placed stricter measures to monitor capital outlays as a way to avoid another budget overrun.

Following the conclusion of probe, PLDT installed a new chief financial officer, while several key officials left the company via early retirement and voluntary resignation.