Velarde’s NOW mulls case vs DICT’s Eliseo Rio after P7B stock wipeout
NOW Corp.’s share price fell by as much as 92.5 percent after the listed technology firm’s affiliate sued the government for what it called illegal insertions in the terms of reference for the selection of the third telco player.
From P7.49 last Oct.9, NOW shares plunged to as low as P4.11 on Oct 12, losing P7 billion in net worth.
The stock slowly recovered, closing at P5.88 apiece Monday or 4.8 percent higher than Friday’s close.
In a filing with the local court, NOW accused the National Telecommunications Commission of inserting onerous provisions such as the hefty performance and participation bonds that were not part of the final terms approved by the telco firms.
NOW blamed Department of Information and Communication and Technology (DICT) Acting Secretary Eliseo Jr., for his “reckless” statement that wiped about billions of pesos off the company’s value.
Miguel Lopez, Head of Investor Relations at NOW, said the company’s lawyers are studying the possibility of filing a case against Rio.
“NOW has assigned its lawyers to study the damages of the reckless statements and the immediate filing of cases,” Lopez said.
He specifically cited Rio’s statement, which insinuated that NOW Telecom could not afford to bid for the country’s third telco slot.
Lopez said Rio’s statement “effectively questioned NOW’s financial capacity with his quip on our P6.3 million net income in 2017.”
“He short of accused that NOW – which he claimed as the mother company of NOW Telecom – has no capacity to provide financial assistance. He also insinuated that the so-called lack of funding was the reason why NOW Telecom filed a case in the Manila Regional Trial Court. These are outright lies,” Lopez said.
“Mr. Rio achieved his objective. He made NOW Corporation owners Php7 billion poorer because of his reckless and unethical utterances which triggered the sudden decline in the company’s stock prices last Oct.10 and 11. It wiped out a significant part of NOW ‘s market capitalization in a matter of days,” he added.
Lopez also pointed out that when Rio mentioned NOW’s P6.3 million earnings lsst year, he failed to say that the company had a market capitalization of P11 billion.