SEC seeks full probe of anomalous 2GO audit

The Securities and Exchange Commission has decided to conduct a full-blown investigation on the accounting anomaly involving 2GO Group, Inc..

An informed SEC source said the corporate regulator would start issuing show-cause orders against previous officials of 2GO and accounting firms RG Manabat & Co., the local unit of of KPMG, and SGV after finding evidence of possible violation of the Securities Regulation Code during a preliminary investigation conducted by the SEC.

The source said a special fact-finding panel earlier formed to conduct the preliminary investigation on the case had been transformed into an investigative panel that would evaluate the case for the possible imposition of sanctions.

SEC chairperson Teresita Herbosa earlier said if the probe uncovered irregularities in the financial statements of 2GO, the publicly-listed company’s management and auditors might face a fine.

“It will not be less than P1 million. And then there is probably a daily fine of P10,000 at least since the time it was discovered and your attention has been called that there has been really wrong accounting. So the penalties will run from that time,” Herbosa said.

The new management of 2GO, led by businessman Dennis Uy’s Udenna Corp. and SM Investments Corp., hired SyCip Gorres Velayo & Co. to conduct the review after taking over the logistics company April last year.

A special audit of 2GO’s financial statements showed the accounts in the previously audited financial statement required restatement “to ensure fair presentation of financial statements and establish accountabilities.”

The restated results showed that 2G0 had a significant decline in the 2015 net income to P109.131 million, or 90 percent lower than the profit of P1.08 billion it disclosed in the 2015 annual report. 

2GO in 2016 said its restated profit was P344.035 million, also 74 percent lower than the P1.34-billion income it earlier reported.

2GO said restated figures in the first quarter of 2017 showed the company posted a net loss of P264.86 million, a reversal from a profit of P267 million it earlier reported.

RG Manabat, the local partner of international accounting firm KPMG, was the auditor of the 2016 and 2015 financial statements of 2GO Group. Former 2GO president and chief executive Sulfico Tagud had denied the allegations.

Topics: Securities and Exchange Commission , 2GO Group , Inc. , RG Manabat & Co. , Teresita Herbosa
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