P1M fine possible for discrepancy in financial statements — SEC chair

A fine of at least P 1 million can be slapped against 2GO Group Inc. if the listed logistics firm is found liable for misdeclaring its financial statements, said Securities and Exchange Commission's (SEC) Chairperson Teresita Herbosa on Tuesday.

"It will not be less than a million pesos," Herbosa told reporters on the sidelines of Phoenix Petroleum's 10th year listing anniversary in Makati City, which was attended by President Rodrigo Duterte.

Herbosa made the statement when asked what penalties await 2GO Group if found they made unscrupulous reporting of their financial statements.

"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 added.

The SEC chair also took note that they will probe the alleged accounting issue of 2GO Group.

"If proven that reported misrepresented is really that big, that calls for a really big investigation," she said.

In a filing first disclosed on the local stock exchange on Friday, July 7, and refiled on Tuesday, July 11, 2GO upheld its decision to stick with the results of the special audit conducted by SyCip Gorres Velayo & Co.

The special audit was made after a new president and board of directors were named.

The restated financial results shaved off 90 percent off the company's net income in 2015 to P109.131 million, from P1.08 billion as 2GO earlier reported.

The company also restated its 2016 net income to P344.035 million, or 74 percent lower than the P1.34 billion as reported earlier by the company.

Meanwhile, 2GO said its first quarter 2017 results should have indicated a net loss of P264.86 million, contrary to an earlier reported net income of P267.562 million.

Dennis Uy, the company's new president and CEO, declined to further comment on the issue.

"Our reaction is already in the disclosure we filed in the PSE," he told reporters.

Herbosa noted that apart from 2GO, the independent auditing firm that conducted the questionable accounting will also be fined and penalized separately.

"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 or internationally accepted principles of accounting," she added.

The SEC chair said the probe into the financial statements of the logistics firm will take three weeks to one month. — BAP, GMA News