September 20, 2024 | 12:00am
MANILA, Philippines — PLDT Inc. has obtained court approval to pay $3 million to investors affected by its P48-billion budget overrun from 2019 to 2022.
In a disclosure to the Philippine Stock Exchange, PLDT said it has received approval from a US court to proceed with its $3-million proposal to settle a class action.
“On Sept. 17, 2024, the court granted final approval to PLDT’s case-ending settlement of a securities class litigation commenced in 2023 against PLDT and certain of its current and former directors and officers by certain investors in PLDT’s American Depositary Shares,” PLDT said.
In turn, PLDT will be free from any admission of liability, fault or wrongdoing, which means none of its executives will be indicted resulting from the capital overspend. The court, however, retains the jurisdiction over how the settlement would go and the distribution of the amount.
In 2023, a class action led by PLDT investors Sophia Olsson and Kevin Douglas was filed against the telco for allegedly losing money from the fiscal mess between 2019 and 2022. Olsson owned two PLDT shares and lost $22.69 from the budget overrun, according to her lawyers.
Douglas, for his part, held 35 shares in the company and lost $240.23 from the budget overspend.
In response, PLDT had asked the court to reject the class action, insisting that the lead plaintiffs own a small interest only in the telco.
The largest Philippine telco had also requested the court to approve its $3 million proposal to just resolve the class action through a settlement.
In 2022, PLDT shook the capital markets when it disclosed a spending breach of P48 billion between 2019 and 2022. The company traced the budget mess to the purchase of new technologies, particularly 5G sites, that it failed to deploy during the pandemic, leading to losses.
Since then, the telco has managed to mitigate the impact of the budget overrun by overhauling its procurement process and removing involved officials. It also convinced some of its vendors to cut its outstanding bill from the capital overspend to P33 billion.
PLDT is currently being managed by tycoon Manuel V. Pangilinan and is enjoying a steady financial performance, booking a profit of P26.61 billion in 2023 after cleaning up its fiscal woes.
Pangilinan took over the telco again after Alfredo Panlilio vacated his post as president and CEO for health reasons.
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