Telecoms company Philippine Long Distance Telephone Company (PLDT) discovered that it did not document 48 billion pesos ($869 million) in purchase orders, causing a record plunge in its share price.
An internal audit carried out by the company last week found that the budget from 2019 through 2022 for its network expansion may have overrun by as much as 130 billion pesos ($2.37bn), but that number has since been revised to 48 billion pesos.
Local media publication Business.Inquirer reported the PLDT chairman Manuel V. Pangilinan (MVP) as saying that "heads will roll," in the wake of the overspending, noting that he was made aware of the issue in October.
"Certainly, we’ve taken a knock on our reputation. We pride ourselves on governance, on disclosures, and we’re gonna get a knock. We have a job in trying to recover our credibility," MVP told the Inquirer.
Shares fell by as much as 19 percent, with many foreign investors exiting the stock, notes Bloomberg, which also reports that PLDT’s collapse even pushed the benchmark Philippine Stock Exchange Index down by 1.3 percent.
An internal investigation held by PLDT, the Philippines' biggest telco, has “so far, not uncovered any fraudulent transactions, procurement anomalies, or loss of assets arising from the Capex spend,” the company said in a statement.
Philippine Securities and Exchange Commission (SEC) has launched an investigation.
In a statement, the SEC said that it had "ordered PLDT to clarify its disclosures to the Commission and the Philippine Stock Exchange (PSE), in relation to statements attributed by the media to the company and its officers, especially with regard to the nature of the PHP48 billion expenditure."
In his interview with the Inquirer, MVP said that the company has already suspended four key officials, with pay, while a more in-depth investigation is being carried out.
Throughout this year, PLDT has been selling and leasing off its tower assets in a bid to raise capital for network expansion and paying off debts.
The company was recently weighing up the sale of 2,000 of its towers in a deal that could fetch $300 million, while earlier this year PLDT agreed to the sale and leaseback of 5,907 towers to Edotco and EdgePoint Infrastructure, in a deal worth $1.5 billion.
PLDT has also explored the possibility of selling its data center unit, but has since cooled on this idea.