MANILA, Philippines — The Securities and Exchange Commission (SEC) has commenced an inquiry into the selloff in shares of telco giant PLDT.
This, after PLDT announced a budget overrun of P48 billion in the last four years.
“The reported budget overruns, as well as the selloff in PLDT shares before the publicly listed company could make the official disclosure, are areas of concern for the SEC, being the regulator of the securities market and the champion of investor protection in the country,” SEC chairman Emilio Aquino said.
The SEC has commenced its probe and ordered PLDT to give more details on the P48 billion capital expenditure overrun.
It likewise directed the PSE and Capital Markets Integrity Corporation (CMIC) to submit initial reports on its investigation into the trading activities that have resulted in the sudden and sharp decline in the share prices of PLDT before the official disclosure of the “budget overruns,” among others.
CMIC acts as the independent audit, surveillance and compliance arm of PSE, in line with its mandate to reinforce the confidence of the investing public in capital market institutions.
As a self-regulatory organization, CMIC is tasked to enforce Republic Act 8799 or the Securities Regulation Code, and the pertinent rules and regulations. Among its powers and functions is to investigate and resolve violations by trading participants of the securities law as well as trading-related irregularities and unusual trading activities involving issuers.
The SEC, through its Markets and Securities Regulation Department, will closely monitor the investigation and will continue to conduct a parallel, independent inquiry into the matter to safeguard the interest of the investing public.
Shares of PLDT plunged by 19.35 percent to P1,192 per share yesterday following an internal investigation on its elevated capital spending.
PLDT’s market capitalization lost P61.79 billion from Friday’s close.
“Investors are seeking answers regarding PLDT’s revealed budget overrun,” said Mikhail Plopenio, researcher at Philstocks Financials.
PLDT reported last week that capex investments reached P379 billion, including a budget overrun of no more than P48 billion. This is almost equivalent to the total income of PLDT in 2020 and 2021.
“We must stress that the maximum P48 billion capex budget overrun represents about 12.7 percent of total capex spend over the period,” PLDT said in a statement last week.
The best estimate is subject to an ongoing internal forensics mandated by the board and its audit committee and discussions with principal vendors with a view of reconciliation of accounts and reduction of such budget overruns.
PLDT also reiterated that the investigation has so far not uncovered any fraudulent transactions or procurement anomalies.
It said capex for 2023 would continue to be elevated as the overruns enter the financial statements this year and next year.
Sources said many stakeholders and investors are awaiting the results of the internal investigation.
Shareholders of PLDT include Hong Kong’s First Pacific Co. and Gokongwei-led JG Summit Holdings Inc.
Shares in other Pangilinan-led companies also declined yesterday.
Manila Electric Co. closed 0.68 percent lower at P291.60, Metro Pacific Investments Corp. lost 0.90 percent to end at P3.29 per share and Philex Mining Corp. declined by 0.73 percent to P2.72 per share.
In Hong Kong, shares of First Pacific lost 1.62 percent to 2,430 Hong Kong dollars.