Saturday, June 22, 2024

PLDT says no fraud on P33-B budget overrun, pins blame on big projects

During its media briefing on Thursday, March 23, to announce its financial results for 2022, telco giant PLDT said an external probe found that there was no fraud involved in the P33-billion budget overrun which it disclosed last year.

In a statement, the telco said a “forensic review of the circumstances surrounding the elevated capital expenditure (CapEx)” has concluded that “identified no evidence of fraud, intentional concealment, or bad faith conduct on the part of any employee of the company”.

The investigation, which was conducted by an external counsel with the assistance of accounting and audit consultants, focused on the period 2019-2022, according to the company.

Having seen no irregularities, PLDT said it is attributing the budget overrun solely on the huge expenses it incurred for big-ticket projects and costly 5G equipment.

To avoid a repeat of the fiasco, the company said it has adopted and is implementing various operational enhancements to its policies and controls relating to CapEx management processes.

PLDT said it has completed discussions with its suppliers representing approximately 80% of its outstanding CapEx commitments.

“That effort resulted in the company’s entry into Settlement and Mutual Release Agreements with its major vendors in March 2023. Those agreements have the effect of reducing the company’s outstanding commitments to these vendors for the acquisition of property and equipment post-2022 to approximately P33 billion, net of advances paid to these vendors,” it stated.

The telco said it plans to engage in similar discussions with non-major vendors to settle its obligations as well.

As a result of the debacle, PLDT announced during the briefing that its CapEx for 2023 will be much lower in 2022’s P96.8 billion.

The company’s net income of P10.4 billion for 2022 dropped by 60 percent from P26.3 billion in 2021.

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