Four key officials have been suspended, with pay, at PLDT Inc. following an inquiry launched by the Philippines’ Securities and Exchange Commission into a capital spending budget overrun of P48 billion ($866 million).
In response to plummeting stock prices as a result of queries surrounding corporate governance and fiscal administration, Manuel V. Pangilinan (MVP), chairperson of PLDT Inc., revealed in an exclusive interview with the Inquirer that they have identified nearly P130 billion worth of undocumented purchase orders made over the last four years alone.
PLDT budget overruns
MVP stated that a senior executive had alerted him to the issue at the beginning of October. The SEC is now looking into these questionable deals, which PLDT Inc. described as “budget overruns”. Last Friday, the company reported that the figure had been adjusted to P48 billion, representing 12% of PLDT’s P379 billion capital spending program in the last four years.
On Monday, shares of the company tumbled by 19%, erasing P62 billion ($1.1 million) in market value. Bloomberg also reports that the budget overrun is almost equivalent to PLDT’s combined 2020 and 2021 net income. It’s also more than twice the P21.46 billion($338 million) of cash and cash equivalents that PLDT had at the end of last quarter.
Four top executives from the firm were suspended, including their heads of finance, procurement and networks.
Sources close to Inquirer reported that a fourth official was responsible for directing the company towards equipment suppliers and vendors who were later revealed to be part of the transactions.
PLDT Inc. has taken the additional step of hiring an independent third-party auditor that is unaffiliated with their external auditor, SGV & Co., to thoroughly review every aspect of the company’s records for potential cases of fraud. SGV & Co. has been the company’s auditor for close to 20 years.
Furthermore, they have requested officials to renegotiate and cancel any excessive supply deals with vendors which had rapidly become too expensive. “It’s highly possible that there were lapses and violations committed that led to this problem, and PLDT as a public company must explain to investors what happened. The SEC must see to it that investors are protected,” Japhet Tantiangco, an analyst at Philstocks Financial Inc, said to Bloomberg.