Tycoon Manuel Pangilinan, who chairs the country’s largest telecommunications firm, was initially apprised of the preliminary discovery of as much as P130 billion in financial anomalies in PLDT Inc. two months ago, before this number was trimmed to the P48 billion the telco announced on Friday.
In an exclusive interview with the Inquirer, the 76-year-old billionaire businessman said a senior company executive informed him about the problem of billions of pesos worth of “undocumented purchase orders” in early October.
This official had discovered that the company had been ordering and paying for billions of pesos worth of internet and phone network equipment without the paperwork needed for accurate record keeping. Without such controls, it is easier for unscrupulous corporate officials or vendors to commit fraud or earn kickbacks from a four-year capital spending budget of P379 billion — one of the biggest among Philippine firms.
“At that early stage, the numbers were very different from what we disclosed [on Friday],” he said. “They were closer to the numbers being quoted in those rumors: 128, 130 [billion pesos].”
Pangilinan — who oversaw the transformation of PLDT from an analog telephone monopoly in the 1990s to the digital giant it is today — said he immediately ordered that an internal forensics team be assembled to assess the damage.
He also ordered the hiring of a third-party auditor that was not associated with PLDT’s external auditor, SGV & Co., to scour the company’s books from top-to-bottom to search for potential cases of fraud.
As of last week, PLDT had already suspended, with pay, four key officials pending the results of a more in-depth investigation, Pangilinan said.
These included the firm’s heads of finance, procurement and networks. Sources said a fourth suspended official was responsible for recommending the equipment suppliers and vendors to the company which eventually turned out to be part of the anomalous transactions.
On Thursday, the company announced that it had named senior vice president Danny Yu as the firm’s group comptroller, senior vice president Noel Lorenzana as its “chief transformation officer” and Joseph Gendrano as “chief technology officer.
“The first step is to find out the extent of the damage, how it happened, why it happened, who were involved in the process,” Pangilinan said. “Those are the first areas so we can assess the nature and extent of the problem, and how we can address it as a second step. We’ve been focused on the forensics part and the solutions part these past two months.”
(Read the full story on this exclusive interview with PLDT chair Manuel Pangilinan on the Inquirer on Monday, including details about the anomalies, whether they would affect the company’s financial performance and how they plan to prevent its repeat in the future.)
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