Publicly-listed Now Corp. blamed Department of Information and Communications Technology acting Secretary Eliseo Jr. for his alleged “reckless” statement that caused the loss of about P7 billion in stock market capitalization.
Now head of investor relations Miguel Lopez said the company’s lawyers were now studying possible legal recourse against Eliseo.
“Now has assigned its lawyers to study the damages of the reckless statements and the immediate filing of cases,” Lopez said.
Lopez said Rio’s statement naming Now Corp.–with only P6.3 million net income in 2017–as the mother company of Now Telecom was “false and a malicious lie.”
“Now Telecom is only an affiliate of Now Corporation,” Lopez said. He said Now Corp. held only 19-percent ownership stake in Now Telecom.
Lopez said the reckless statements of Rio damaged the value of Now Corp. shares in the market, resulting in the loss of about P7 billion in market capitalization.
Rio said, however, his statement about Now was not the reason for the drop of its shares in the Philippine Stock Exchange.
“They are blaming me, but more or less it’s because of their action,” Rio said, adding that Now’s share price declined on Oct. 9 even before he made the statement on Oct. 10.
“What I said is just true. They should tell the public that on Oct. 9, nobody made any statements. How can they say that I’m the reason? Their action caused the drop of its share prices. I think the people are punishing them enough, we don’t have to do anything,” Rio said.
Lopez said Rio, in statement reported by various media entities and posted on the DICT’s website, insinuated that Now Telecom probably could not afford to bid for the right to be the new major player in the telecom sector.
“The participation fee of P1 million it paid may have significantly cost Now Telecom’s mother company, Now Corp., of its operational income which only stood at P6.3 million in 2017,” Rio was quoted as saying in various media reports.
Share prices of Now dropped sharply by 52 percent on Oct. 10 after Rio’s statements were published in various media outlets.
The company’s share prices dropped 25.10 precent from P7.49 to P5.61 as of Oct. 12.
Lopez said Rio’s statement “effectively questioned Now’s financial capacity with his quip on our net income at P6.3 million 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.”
“Mr. Rio achieved his objective. He made Now owners P7 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 Corp.’s market capitalization in a matter of days,” Lopez said.
Rio said President Rodrigo Duterte was supporting the selection process for the new major player in the telecommunications sector.
The Manila Regional Trial Court Branch 42 earlier denied the petition of Now Telecom for the issuance of a 20-day temporary restraining order for “lack of urgency.”
The court set the hearing for preliminary prohibitionary injunction on Oct. 23 and 24 this year.
Businessman Mel Velarde’s Now Telecom questioned certain provisions in the terms of reference for the selection of a new major player in the sector, saying the rules violated existing laws and could also be declared onerous, confiscatory and potentially extortionary.