PLDT files $3-M settlement deal vs US class action lawsuit

PLDT Inc. has proposed a $3 million settlement deal to resolve the class action lawsuit filed against them in a US court concerning an alleged ₱48 billion or $872-million capital expenditure (capex) spending overrun.

In a disclosure to the Philippine Stock Exchange (PSE) on Thursday, Feb. 22, the telco stated that it entered into a Stipulation of Settlement submitted to the US District Court for Central District of California on Feb. 16.

If approved by the Court, following notice to the settlement class, the settlement class will receive $3 million as payment.

“The proposed settlement agreement contains no admission of liability, fault or wrongdoing by any defendant. If approved by the Court, the settlement will resolve the U.S. Class Action in its entirety as against all defendants,” said the disclosure.

On Dec. 16, 2022, PLDT said in a disclosure that it was investigating the results of an internal audit that determined an aggregated capex investment amount of ₱379 billion from 2019 to 2022, including a budget overrun of ₱48 billion.

The P48 billion represented around 12 percent of total capex spent over the period, it noted.

“The investigation has, so far, not uncovered any fraudulent transactions, procurement anomalies, or loss of assets arising from the capex spend,” the telco affirmed.

In a separate disclosure on Dec. 22, 2022, PLDT explained that the “bulk of the ₱48 billion capex overspend involves the procurement of network equipment necessary to provide stronger connectivity to subscribers, specifically 5G cell sites for our mobile network and fiber rollout.”

However, after the disclosures, PLDT'S saw an over 19 percent plunge in the price of its shares to ₱1,192 per piece as of Dec. 19, 2022.

Upon receiving a notice from the PSE to clarify their statements, the telco told the PSE on Dec. 27 that investigations remain ongoing.

Negotiations with vendors led to reduction of the capex overrun to ₱33 billion.