LISTED transport and logistics firm 2Go Group, Inc. could face a P1-million fine once an inquiry proves it misdeclared its financial statements, a top Securities and Exchange Commission (SEC) official said late Tuesday.
“It will not be less than a million pesos. 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,” SEC Chairperson Teresita Herbosa told reporters on the sidelines of Phoenix Petroleum’s 10th listing anniversary.
“Every year, we evaluate all the financial statements of all publicly listed companies. In this instance, we haven’t gotten to 2016 financial statements yet. Yung [The] restated 2015 was just the interim. This time, we are going to prioritize this because of the reports regarding the over-inflated figures. On the parties to explain why that happened, it will probably entail a special audit,” she added.
Reports came out last Friday that the company had misdeclared its financial statements for the full year 2015 up to the first quarter of 2017.
2Go’s net income in 2015 was supposedly P109.1 million, or lower by 90 percent than the P1.08 billion it reported earlier.
Its net profit for 2016 should be only P344 million, 74 percent lower than the P1.34 billion announced earlier.
For the first quarter of 2017, 2Go said it should have indicated a net loss of P264.8 million, contrary to a positive “net income” as reported earlier.
“For the officials, following our authority to accredit auditors when they do publicly listed companies, we will have to look at whether we have to revoke and impose penalties on them,” Herbosa said.
“Financial statements originate from the company’s finance officials. They will also be held liable if proven there [was]fraudulent misrepresentation or even deficiencies, meaning failure to comply [with]international financial reporting standards, internationally accepted principles of accounting,” she said, adding that such cases are rare and will require a “big investigation.”
2Go President and CEO Dennis Uy has approved the submission of restated earnings in the wake of reports of misdeclared results.
“The new management and board of directors of 2GO engaged SGV and Company to audit the publicly listed company’s balance sheet and income statement for the periods ending December 31, 2016 and March 31, 2017 to ensure their fair presentation and establish accountabilities,” 2Go’s parent company Chelsea Logistics Holdings Corp. said.
“It is only prudent to disclose and release the restated financials; it is being transparent to our investors and stakeholders,” it added.
“The restated items are non-cash and non-recurring. Thus, the prospective profitability of 2GO remains strong,” the company said.
Chelsea acquired a significant interest in 2GO during the first quarter of the year.
The management of 2Go Group has until tomorrow (June 14, Friday) to submit the written clarifications to the Securities and Exchange and Commission about the restatement of financial results.
SEC approves Chelsea IPO bid
The SEC on Tuesday approved the application of Chelsea Logistics to conduct an initial public offering (IPO).
Chelsea Logistics plans to issue 1.8 billion shares priced at P14.63 per share to raise about P8 billion in fresh funds to bankroll its expansion plans.
“Thank you. I hope we’ll get the support of the investors,” Uy said.
Uy is the chairman of Udenna Corp., the parent company of both Chelsea Logistics and Phoenix Petroleum.