PLDT asked to set record straight
MANILA: The Philippine Stock Exchange has asked PLDT Inc to clarify its announcement that the company did not uncover any fraud, anomaly, overpricing or unrecorded transactions in its 48-billion peso ($871 million) capital spending overrun.
PSE President Ramon Monzon also said while the exchange’s market surveillance unit initially found no evidence of insider trading on PLDT shares on Dec 16, the day the Philippines’ biggest phone company by revenue disclosed what it called a capital spending overrun, the investigation is continuing.
PLDT yesterday said an ongoing review of what happened showed there was “no fraud, no anomalies, no evidence of overpricing, and no unrecorded transactions in relation to the overrun”. It said there will be no write-off of assets purchased with the bulk of the 48-billion peso overspend that included 5G cell sites for its mobile network.
“For you to make that statement, that means the investigation has been completed. If the investigation is over, that’s material information that should have been disclosed,” Mr Monzon said in an interview with Bloomberg News. “Why wasn’t it disclosed to us?”
The bourse has sent PLDT a letter asking for clarification on that matter and expects a response by Friday morning, he said.
PLDT is at the centre of investigations by the PSE’s Capital Markets Integrity Corporation, or CMIC, and the Securities and Exchange Commission after its Dec 16 revelation raised concerns over corporate governance and fiscal controls at the nearly 100-year-old company that has one of the largest capitalisation among Philippine-listed firms.
“Initially, we didn’t see any indication of insider trading,” Mr Monzon said, referring to the selloff last Friday just before PLDT’s disclosure.
Most of the sellers were foreign brokers whose clients are foreign institutional investors. “There’s a small level of comfort when you talk about foreign brokers,” Mr Monzon said. “These people are not going to allow their organisation to be used for any illegal things.”
But he said CMIC’s review is continuing and is focused on finding out who the ultimate sellers were and whether they had prior knowledge of what happened at PLDT. The CMIC is looking at trades in PLDT from November through Dec 16 after the Philippine Daily Inquirer reported that a senior executive had informed PLDT Chairman Manuel Pangilinan about the issue in early October.
“It might take PLDT a little longer to regain the full confidence of investors, but certainly this is still a very profitable company,” Mr Monzon said.
Despite the overhang from the recent selloff in PLDT shares, the bourse’s president is optimistic about the outlook for the stock market in 2023, citing the improving economy. He expects 14 initial public offerings for next year.