LISTED transport and logistics firm 2Go Group, Inc. could face a P1-million fine once an inquiry proves it has 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 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.
On Friday, reports said 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 had reported.
Its net profit for 2016 should be only P344 million, 74 percent lower than the P1.34 billion the company had announced.
For the first quarter of 2017, 2Go should have indicated a net loss of P264.8 million, contrary to a positive “net income”, said Herbosa.
“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 is fraudulent misrepresentation, or even deficiencies meaning failure to comply to international financial reporting standards. internationally accepted principles of accounting,” she said, adding that such cases are rare and will require for a “big investigation.”
On the other hand, businessman Dennis Uy, who serves as the president and chief executive officer of unit 2Go Group Inc., has approved an earnings restatement amid reports of faked 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 claimed.
Chelsea acquired a significant interest in 2GO during the first quarter of the year.