PLDT close to settling US lawsuit

Telco giant PLDT Inc. is inching closer in settling a class action suit filed by investors in the US over its budget fiasco in 2022.

In a disclosure to the Philippine Stock Exchange, PLDT said the court granted the preliminary approval of the $3 million settlement, or around P165 million, it proposed on Feb. 16.

“Among other things, the court also approved plaintiff’s proposed program to notify settlement class members of the settlement and set a hearing date of Aug. 5, 2024 to address whether to grant final approval of the settlement,” it said.

According to PLDT, the court’s preliminary approval order is the initial step in the approval process of the settlement.

“If finally approved by the court at or after the Aug. 5, 2024 hearing, the settlement will resolve the US class action in its entirety as against all defendants,” it added.

A class-action lawsuit allows people with similar grievances to sue a common defendant as a group, in this case, the US-based shareholders of PLDT.

In 2023, a class action suit led by shareholders Sophia Olsson and Kevin Douglas was filed against PLDT for reportedly sustaining losses from the telco’s budget overrun.

Olsson, represented by The Rosen law firm, owned two PLDT shares and lost $22.69 from the capital overspend.

On the other hand, Douglas, represented by Levi & Korsinsky LLP, held 35 shares in the company and lost $240.23.

PLDT earlier asked a California court to reject the class action, insisting that lead plaintiffs own a small interest in the telco.

In 2022, PLDT shook the capital markets when it informed shareholders of a spending breach of P48 billion between 2019 and 2022.

The telco attributed the capital overrun to the procurement of new technologies, including 5G sites that it failed to roll out during the pandemic, leading to losses.

Since then, PLDT has resolved the budget mess by negotiating with vendors to bring down the budget overspend to P33 billion.

The earnings of PLDT surged to P26.61 billion in 2023 from P10.49 billion in 2022, driven by the across-the-board increase in revenue from the individual, home and enterprise segments.