SEC Chairperson Lilia Bautista said the three-man panel tasked to follow-up and validate earlier findings, which charged that Piltel committed "window dressing" on its financial statements and failed to disclose information on its debt payments, came back empty-handed last Thursday due to the unavailability of the records in question.
"After all these years, are they going to tell us that they are not yet ready?" Bautista said.
She said Piltel has been given five more days, or until today, to present the documents to the SEC panel or face the immediate suspension of its trades at the stock market.
Under the Securities Regulation Code, the SEC was given the power to summarily suspend trading in any listed security on any Exchange or other trading market for a maximum period of 30 days if such action is necessary for the protection of investors or if the public interest so requires.
Last month, the SEC ordered the resumption of the probe on Piltel’s financial condition in 1998 and prior years to verify if indeed the audited figures were misleading.
The probe was sparked by news reports that came out in January 1999 saying that Piltel difficulties in servicing its huge P35-billion debt load forcing the company to forge a compromise rehabilitation program with its creditors.
The SEC said while the liabilities were disclosed in previous reports, "the magnitude of effects in its operations or its liquidity to meet these obligations were not fully disclosed in said reports."
Furthermore, the SEC said defaults in the payment of interest and suspension of principal payments during the first week of January 1999 were similarly not promptly disclosed by Piltel.
In a joint statement, PLDT and Piltel said that while they have not yet received notification from the SEC on the re-opening of the case, "should the SEC wish to conduct such an investigation, however, it will receive the full cooperation of PLDT, Piltel and their respective managements."
Piltel also disputed the allegation that its financial statement in 1998 was misleading or distorted. The company also belied the claim the claim that it did not promptly disclose its suspension of debt payments in 1999 and the impact of the suspension on the company’s operations.
"Indeed, it was at the insistence of the new Piltel management team installed in January 1999 that the auditors emphasized in the report accompanying the 1998 accounts that Piltel had suspended all principal payments to lenders, that the company had continued to report significant losses, and that there were substantial doubts as to Piltel’s ability to continue as a going concern," the joint statement said.
Piltel was taken over by the First Pacific Group following the Hong Kong conglomerate’s entry into PLDT in November 1998.
In 1998, Piltel reported losses of P161 billion reflecting operating losses and provisioning for loans. With its shift from analog technology to a GSM-based digital network, the cellular firm continued to suffer heavy losses, ending last year with a P5.2-billion loss, higher than the P3.9-billion loss in 1999.
After years on the negotiating table, Piltel finally made significant progress on its debt restructuring program with over 95 percent of all parties, including creditor banks, Marubeni Corp. and holders of the convertible bonds, now expressing support for the company’s rehabilitation plan. – Conrado Diaz Jr