By Denise A. Valdez, Reporter
LISTED Now Corp. threatened to file a case against Department of Information and Communications Technology (DICT) Acting Secretary Eliseo M. Rio Jr., blaming him for the drop in the company’s share price last week.
However, several stock analysts noted investors sold their Now shares mainly because of the case filed by its affiliate Now Telecom against the National Telecommunications Commission (NTC) over the terms of reference for the third telco player bidding.
In a statement on Monday, Now Corp. Head of Investor Relations Juan Miguel M. Honorico-Lopez said the company has asked its lawyers to study the “damages of the reckless statements (by Mr. Rio) and the immediate filing of cases.”
“(Mr. Rio) short of accused that Now Corp. — 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,” he said.
Now Telecom sued the NTC last Monday over alleged new requirements in the final terms of reference, describing them as ”onerous, confiscatory and potentially extortionary.” The Manila court, however, dismissed its petition for a temporary restraining order (TRO).
Sought for comment, Mr. Rio said he could not possibly be the cause for the decline in Now shares last week, considering he only commented on the court case late afternoon of Oct. 9, when the stock market already closed.
“We will answer whatever accusation that they will have. But they must not forget the timeline. Oct. 8, Monday, they bought bid documents. But immediately after that they brought us to court, which is Oct. 8. (Then) Oct. 9, when the public knew about their case, their stocks went down. Wala kaming imik noon [We haven’t said anything yet],” Mr. Rio said on Monday.
Now Corp. took offense after Mr. Rio said on Oct. 9 that “the participation fee of P1 million it paid may have significantly cost Now Telecom’s mother company, Now Corp.’s of its operational income which only stood at P6.3 million in 2017.”
Mr. Lopez claimed that Mr. Rio’s statements questioning Now Corp.’s financial capability, “damaged the value of Now Corp. shares in the market and caused the loss of about P7 billion in market capitalization.”
The Velarde-led company said its shares plunged to P5.15 each on Oct. 10 from P7.49 each on Oct. 9. On Monday, Now shares jumped 4.81% or 27 centavos to P5.88 apiece.
Mr. Lopez also clarified that Now Telecom is only an affiliate of Now Corp., who owns only 19% in the company.
Diversified Securities, Inc. equities trader Aniceto K. Pangan said the drop in Now’s share price cannot be attributed solely on Mr. Rio’s statements.
“Mainly, it’s their aggressive opposition stance on the DICT new Terms of Reference which they referred as barriers to entry. This may manifest their weakness to comply to certain provisions,” Mr. Pangan said in a mobile text message.
Aristotle D. Reyes, Jr., equities trader at UPCC Securities Corp., also said investors were disappointed with Now Telecom’s decision to file a case against the NTC.
“I think more than the comment of the Secretary is the move by Now to file a case against NTC. I think that’s where the disappointment of the investors came from. If you are an investor, you don’t want your company you invested to sue the government. Instead, you want to see that now is more than capable among others, especially financially,” Mr. Reyes said via text message.
Meanwhile, Mr. Rio said President Rodrigo R. Duterte told him to “just do what is right” when he informed him of the court case against the NTC.
“Why are they including the name of the President, when the President already said, ‘I don’t want any transaction, any papers to go up to me. Dapat ‘yan ma-resolve ng department [That should be resolved by the department in charge],’” he said.
Mr. Rio was reacting to Now. Corp. President Mel V. Velarde saying it would be best if Mr. Duterte took over the selection of the third telco.
“The rules and regulations that took us almost one year to formulate with all the inputs from the different stakeholders, including consumer groups, all down the drain because of one na gusto niya dalhin sa Presidente [because of one who wants to bring it to the President]? What does that mean, malakas ba siya sa Presidente that he can do that [is he favored by the President that he could do that]?” he added.