The day after the Philippines’ largest phone company plunged by a record 19 percent following an audit disclosure that shocked investors, Chairman Manuel Pangilinan tweeted that his arowana, a freshwater fish, had just died.
THE day after the Philippines’ largest phone company plunged by a record 19 percent following an audit disclosure that shocked investors, Chairman Manuel Pangilinan tweeted that his arowana, a freshwater fish, had just died.He was referring to the scandal that has engulfed PLDT Inc., with the company losing more than $1 billion in market value and becoming the subject of a regulatory investigation and a probe into possible insider trading.
PLDT was motivated by a need to keep up in an increasingly competitive industry, according to a company disclosure that cited CEO Alfredo Panlilio at a briefing for investors and analysts this week. The company had a fierce rivalry with local peer Globe Telecom Inc. and was under pressure from a new entrant backed by China Telecommunications Corp.
The Makati-based firm said after the market closed on December 16, a Friday, that an internal audit had found as much as 48 billion pesos in previously undisclosed spending. The outlays ran from 2019 through 2022, a period in which PLDT forked out 379 billion pesos mostly to improve its network and upgrade to 5G.
PLDT executives including Pangilinan and Panlilio told the Wednesday briefing that the previously unreported spending was for equipment to transform the network after years of underinvestment, according to a company disclosure the day after. Panlilio said they felt pressure to do so, partly because then Philippine President Rodrigo Duterte was pushing telecommunications companies to shape up and due to increasing competition and the pandemic.
Anabelle Chua, PLDT’s chief financial officer and chief risk management officer, has been put on paid leave so an “independent investigation” can be conducted on the transactions, the company said this week. On Dec. 15, PLDT separately said the board confirmed three new appointments: a group controller, chief technology officer and chief transformation officer.
Later, PLDT said it plans to borrow 35 billion to 45 billion pesos over two years to fund general expenses including capital spending and dividend payout.
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