By Ashley Erika O. Jose, Reporter
THE US District Court for the Central District of California has granted final approval to PLDT Inc.’s settlement of a securities class-action lawsuit.
The case, which involved allegations against PLDT and certain current and former directors and officers regarding false and misleading statements about the company’s capital expenditures and internal controls, has been settled for $3 million, the Pangilinan-led telecommunications company said in a disclosure on Thursday.
The court’s approval, issued on Sept. 17, concludes the litigation that began in 2023.
The settlement, which “contains no admission of liability, fault, or wrongdoing by any defendant,” was initially agreed upon in February.
The court will retain jurisdiction over the implementation of the settlement and the distribution of the settlement fund, according to PLDT.
For market watchers, the settlement of the class-action suit is a significant legal development for PLDT.
“The US district court’s approval of the settlement puts to rest the class action and finally removes any remaining investor concerns about the litigation,” Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said PLDT’s emphasis that the settlement means no admission of liability mitigated any reputational damage to the company.
To recall, in 2022, the company discovered a P48-billion discrepancy, which accounted for about 12.7% of its P379-billion capital expenditure over the past four years since 2019.
Last year, PLDT confirmed that a US shareholder filed a securities class-action lawsuit against the company, alleging violations of Federal Securities Laws.
The case cited the company’s disclosures indicating a budget overrun of P48 billion during the period.
Further, Chinabank Capital’s Mr. Colet said the small size of the settlement amount will hardly impact PLDT’s financial performance.
“What is important is for the company to continue improving and strengthening its governance and internal controls to avoid investor litigation in the future,” Mr. Colet said.
The resolution could also provide a sense of “certainty” for investors which might help improve investors’ confidence, Globalinks Securities’ Mr. Arce said.
“For investors, the fact that the legal issue has been settled without an admission of fault could be seen positively. This development might reduce uncertainty and litigation risks that could have lingered, thus potentially boosting investor appetite in the short term,” Mr. Arce said.
At the stock exchange on Thursday, shares in the company closed unchanged at P1,438 apiece.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.