Megaworld’s strategic focus will extend beyond Metro Manila as the company seeks to develop townships in new growth areas like Calabarzon, Mimaropa, Northern Luzon, and selected regions in the Visayas and Mindanao.

“This [capital expenditure] program will allow Megaworld to set its sight on various opportunities in building townships or mixed-use lifestyle communities, which is already the strength of our company. Aside from residential, office, malls, and hotels, there are more to offer to make every township more relevant and sustainable to the next generation of Filipinos,” said Kevin Tan, Megaworld’s chief strategy officer.

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Megaworld exceeds targets, nets P14.4 billion in 2022

Megaworld is set to construct additional hotels and MICE (meetings, incentives, conventions, and exhibitions) facilities, including convention centers, in key cities within the next five years to leverage the increasing tourism demand.

In response to the rising demand for workspaces, Megaworld is set to construct more “sustainable” Grade A office towers. These office towers will cater to emerging businesses and industries while also accommodating the continued demand from the business process outsourcing sector. The selected locations for these office towers include Metro Manila, Pampanga, Bulacan, Cavite, Cebu, Iloilo, Bacolod, and Davao.

Megaworld also plans to expand its Lifestyle Malls portfolio by constructing new malls and commercial developments in various regions. Pampanga, Bulacan, Cavite, Rizal, Cebu, Bacolod, and Davao have been identified as prime locations for these upcoming projects.

“There will be some land acquisitions during this period, and we are also preparing for that. Most of the budget will really be used to spruce up and expand the existing townships and, of course, to put up more residential, offices, malls, and hotel properties,” Tan said.

Since its incorporation in 1989, Megaworld and its affiliates have launched more than 741 residential
developments, 74 premier offices, 24 lifestyle malls and commercial centers, and 13 homegrown hotels and resorts.

Megaworld, so far, owns or has development rights to over 5,000 hectares of land located throughout the Philippines. – Rappler.com

This violation was related to BPI’s disposal of its treasury shares, which it acquired after its merger with BPI Family Savings Bank. A treasury share is a share of the company issued and sold to the public, which was later acquired or repurchased by the same company.

The Ayala-led bank originally intended to decrease its authorized capital stock by retiring the acquired treasury shares, but the BSP did not approve of this, stating that the retirement of treasury shares does not count as a sale or disposition of shares in accordance with Section 10 of the General Banking Law.

Section 10 allows a bank to purchase or acquire its own capital stock after obtaining the approval of the BSP’s Monetary Board. In any case, the bank must sell or dispose of the treasury stocks within six months from the time of their purchase or acquisition. 

After the BSP’s initial disapproval, in March 2023, the BPI’s board of directors then approved the declaration of property dividends to act as the bank’s mode of disposal for the treasury shares. Under it, 406,179,276 common shares being held in treasury would be distributed to all eligible stockholders as of March 29. BPI also obtained the approval of the Securities and Exchange Commission on June 13.

BPI said it would announce the payment date and details of the distribution of the dividend “in due course.” The bank also said that the dividend declaration as a mode of disposal for the treasury shares would “only be completed after obtaining regulatory approvals.”

In a letter also dated June 13, the BSP imposed the P1-million penalty for BPI’s failure to comply with Section 10 on the disposal of treasury shares.

BPI sees boost from Gokongwei network with Robinsons Bank merger

– Rappler.com

Rather than a sign of disrespect for the billionaire who made his fortune in commercial television before going into politics, the buoyancy of the shares reflects the options that could open for the company as its founder exits the scene.

MFE, 48% owned by the Berlusconi family’s Fininvest holding, runs commercial TV channels in Italy and Spain, and has built a substantial stake in Germany’s ProSieben.

Led by the former PM’s son Pier Silvio Berlusconi, it has pursued European expansion from its Italian roots to try to hold its own against the US streaming giants that take a growing chunk of viewers.

In a fast-changing media landscape, some investors bet that his heirs may be more open to seeking a partner for MFE, or selling to a larger rival.

MFE’s second biggest shareholder, French media group Vivendi, is widely seen in the industry as the main candidate. But a standstill accord the two companies reached in 2021 to settle a years-long legal war prevents Vivendi from raising its 23% stake until 2026.

B-shares in MFE rose as much as 10.3% on Monday and were up 3.7% at 1330 GMT, giving it a market capitalization of 1.6 billion euros.

“When the ownership of a company is in question, investors will first buy and then see what happens,” said Carlo Alberto Carnevale Maffè, strategy professor at Milan’s SDA Bocconi management school.

‘Pneumatic drill’

The 86-year-old tycoon never publicly named an heir, but people familiar with the matter told Reuters his eldest child, Marina, who already chairs Fininvest, is the most likely to take the reins.

Marina, 56, has led Fininvest’s board since 2005. In addition to MFE, the family holding company also controls publishing house Mondadori and has a big stake in asset manager Mediolanum.

Shares in Mondadori rose 1.7%.

“Berlusconi may not have laid out succession plans for his party, but he certainly did for his businesses,” Carnevale Maffè said.

Fininvest said in a note on Monday that there would be no changes in the way its businesses are run and a person close to the matter said Berlusconi’s children were united on this.

Prior to 2005, Marina served as deputy chairperson at Fininvest for nine years.

Described by people who work with her as a tough and demanding boss, Marina was catapulted by her father into corporate life in her early 20s and her influence grew when he was forced to take a hands-off role following his entry into politics in 1994.

Fedele Confalonieri, a lifelong friend of her father and chairman of MediaForEurope, once likened her tough business drive to a “pneumatic drill.”

A mother of two and married to a former La Scala ballet dancer, she has seen her leadership at Fininvest grow in importance over the past decade as her father’s health faded.

In a 2018 television interview, Berlusconi said Marina was the child closest to him and that he consulted daily with her before taking any decision, which he also used to do with his mother before she passed away.

“Silvio put her down to work when she was barely more than a child,” Vittorio Giovanelli, a former director of Berlusconi’s Rete4 TV channel, wrote in a 2003 book, adding he started bringing Marina to business meetings in 1985.

“She listened and took notes for hours, she would never stop.”

Inheritance

Berlusconi has a total of five children from his two ex-wives. Marina and Pier Silvio, born from his first marriage, both have executive roles at the family’s businesses, unlike the remaining three heirs.

He was not legally married to his partner Marta Fascina, though on his deathbed he would call her his wife.

Under Italian law, his children have a right to inherit two-thirds of his wealth in equal parts, while the deceased is free to dispose of the remaining one-third how he pleases.

The way Berlusconi decided to divide up his assets among his heirs will only be known once any will is opened.

The one-third of assets which can be assigned freely can be used to pick a leader for the Fininvest companies provided other assets are sufficient to compensate the others, law professor Emanuele Lucchini Guastalla said. – Rappler.com

The settlement on Monday, June 12, follows months of embarrassing disclosures that JPMorgan ignored internal warnings and overlooked red flags about Epstein because he had been a valuable client.

Epstein was a JPMorgan client from 1998 to 2013 and was kept on even after being arrested in 2006 on prostitution-related charges and pleading guilty two years later.

Monday’s accord would resolve claims against the largest US bank by potentially more than 100 victims, led by a former ballet dancer known as Jane Doe 1, who said Epstein abused them when they were young women and teenage girls.

Epstein killed himself at age 66 in a Manhattan jail cell in August 2019 while awaiting trial on sex trafficking charges.

“It could be that the bank doesn’t want this to stay in the press,” said Carliss Chatman, a professor at Washington and Lee University School of Law in Virginia. “At a time Americans are questioning the banking system, associating Chase with human trafficking is not good for business.”

Davia Temin, chief executive of crisis management firm Temin and Co., said settling rather than fighting to the end sends “the right message across Wall Street.”

The settlement of the civil case requires approval by US District Judge Jed Rakoff in Manhattan.

“Any association with [Epstein] was a mistake and we regret it,” JPMorgan said in a statement. “We would never have continued to do business with him if we believed he was using our bank in any way to help commit heinous crimes.”

Monday’s settlement came three and a half weeks after Deutsche Bank, where Epstein was a client from 2013 to 2018, agreed to pay $75 million to end a similar lawsuit by Epstein victims.

“Deutsche Bank’s settlement…likely created momentum,” said Adam Zimmerman, a law professor who recently accepted a position at the University of Southern California. “A settlement with Epstein’s victims frees JPMorgan to begin to turn the page and change the narrative.”

The $290-million settlement amount was confirmed by David Boies, a lawyer for Epstein’s victims.

JPMorgan did not admit wrongdoing in agreeing to settle, according to a person familiar with the matter, who spoke on condition of anonymity.

“The settlements signal that financial institutions have an important role to play in spotting and shutting down sex trafficking,” Sigrid McCawley, a lawyer for victims in both lawsuits, said in a statement.

Pointing the finger

JPMorgan still faces a lawsuit by the government of the US Virgin Islands, where Epstein owned two neighboring islands and was suspected of abusing victims in his mansion.

It is also suing former executive Jes Staley for shepherding Epstein’s relationship with the bank and concealing what he knew about his former friend.

JPMorgan wants Staley to cover its losses in both lawsuits and forfeit eight years of pay.

Last month, Rakoff said JPMorgan could be liable to Epstein’s victims if they could show Staley had firsthand knowledge that Epstein ran a sex-trafficking venture.

Staley left JPMorgan in 2013 and was later Barclays’ chief executive for six years.

He testified under oath on Saturday, June 10, two weeks after JPMorgan chief executive Jamie Dimon, in his own deposition, denied discussing Epstein’s accounts.

In a statement, the US Virgin Islands said it “will continue to proceed with its enforcement action to ensure full accountability for JPMorgan’s violations of law.”

The territory’s case is the largest remaining over Epstein, following civil lawsuits against his estate and the conviction of former girlfriend Ghislaine Maxwell for aiding his abuses. Maxwell is appealing her conviction and 20-year prison sentence.

Lawyers for Staley did not respond to requests for comment.

Staley has said he regretted befriending Epstein but denied knowing about his sex trafficking. It wasn’t clear whether his June 10 deposition was a factor in Monday’s settlement.

“Chase’s defense has been that Staley was a lone wolf and this wasn’t Chase’s culture, but more evidence had been coming out that may make it harder for Chase to point the finger at him,” Chatman said.

Another key JPMorgan executive who has been a focus of the litigation is Mary Erdoes, its asset and wealth management chief.

Epstein’s victims have portrayed her in court filings as a key defender of keeping Epstein as a client, including after former general counsel Stephen Cutler told her and Staley in 2011 the bank should terminate the relationship.

Dimon said in his deposition that Cutler had authority to override Erdoes and Staley and fire Epstein. Cutler was not immediately available for comment on Monday.

“While we regret any association with Jeffrey Epstein, we would never have continued to do business with him if we believed he was using our bank to commit heinous crimes,” a JPMorgan spokesperson said when asked about Erdoes’ involvement. “In fact, Mary Erdoes and others exited him as a client six years before he was charged with human trafficking.” – Rappler.com

Marking the closing of the biggest banking deal since the 2008 financial crisis, UBS chief executive Sergio Ermotti and chairman Colm Kelleher said despite challenges there were “many opportunities” for clients, staff, shareholders, and Switzerland.

The combined group will oversee $5 trillion of assets, giving UBS a leading position in key markets it would otherwise have needed years to grow in size and reach. The merger also ends Credit Suisse’s 167 years of independence.

Having peaked at more than 82 Swiss francs in 2007, the price of Credit Suisse shares has been eroded by scandals and losses in recent years and closed at 0.82 francs on Monday.

UBS shares gained 0.8%, valuing the bank at about 64 billion Swiss francs ($70 billion).

The two banks now jointly employ about 120,000 worldwide, although UBS has already said it will be cutting jobs to reduce costs and take advantage of synergies.

UBS announced a string of management changes with the closing including at Credit Suisse AG, which is now a UBS subsidiary that will be run separately.

Of the more than 160 leaders being confirmed or appointed, just over a fifth are from Credit Suisse, a UBS spokesperson said.

Andre Helfenstein will remain as head of the Credit Suisse domestic business, which UBS has said it is considering all strategic options for.

Closing rush

UBS agreed on March 19 to buy Credit Suisse for a knockdown price of 3 billion Swiss francs and up to 5 billion francs in assumed losses in a rescue orchestrated by Swiss authorities with Switzerland’s second largest bank on the edge of collapse.

On Friday, June 9, UBS finalized an agreement on the conditions of a 9-billion-Swiss-franc public backstop for losses from winding down parts of Credit Suisse’s business.

UBS sealed the takeover in less than three months, a tight timetable given its scale and complexity, in a race to provide greater certainty for both clients and employees.

The deal, however, exposed two myths – namely, that Switzerland is a steady, predictable investment destination and that banks’ problems would no longer hit taxpayers.

“It was supposed to be the end of too-big-to-fail and state-led bailout,” said Jean Dermine, professor of banking and finance at INSEAD, adding that the episode showed this central reform after the global financial crisis had not worked.

The rescue also showed that even big global banks are vulnerable to bouts of panic, said Arturo Bris, professor of finance and director of the IMD World Competitiveness Center. An outflow of deposits forced Credit Suisse to seek help.

Switzerland’s reputation as a “safe, predictable political environment where the private sector operates freely and without government intervention” had taken a hit, Bris added.

The disappearance of Credit Suisse’s investment bank, which UBS has said it will seek to cut back significantly, marks yet another retreat of a European lender from securities trading, a business now largely dominated by US firms.

Since the global financial crisis, many banks have pared back their global ambitions in response to tougher regulations.

Swiss regulator FINMA, which came under fire for its handling of the situation, said one of the most pressing goals for the newly merged bank was to quickly reduce the risk of the former Credit Suisse investment bank.

UBS is set to book a massive second-quarter profit after buying Credit Suisse for a fraction of its so-called fair value.

Ermotti has, however, warned the coming months will be “bumpy” as UBS gets on with absorbing Credit Suisse, a process it said will take three to five years.

Presenting the first snapshot of the new group’s finances last month, UBS underscored the high stakes involved, by flagging tens of billions of dollars of potential costs – and benefits, but also uncertainty surrounding those numbers.

Next challenge

Possibly the first challenge for Ermotti, brought back to UBS to steer the merger, will be a politically fraught decision about the future of Credit Suisse’s “crown jewel.”

Bringing its domestic business into the UBS fold and combining the two banks’ largely overlapping branch networks could produce significant savings, which Ermotti has indicated as a base scenario.

But he will need to weigh that against public pressure to keep Credit Suisse’s brand, identity, and, critically, workforce.

Analysts say public concerns the new bank will be too big – with a balance sheet roughly double the size of the Swiss economy – means UBS might need to tread carefully to avoid being exposed to even tougher regulation and capital requirements.

They also warn that uncertainty inevitably caused by a takeover of such scale can leave UBS struggling to retain staff and customers and that it remained an open question whether the deal can deliver value for shareholders in the long run. – Rappler.com

$1 = 0.9101 Swiss francs

The SEC decision, made during its June 6 meeting, allows Ayala Land to issue these bonds in one or multiple tranches over the next three years, subject to certain conditions.

This shelf offering provides Ayala Land with an opportunity to raise significant capital to support its financial needs and strategic initiatives.

In the initial tranche, Ayala Land plans to offer up to P12.25 billion in five-year and 10-year bonds. Additionally, an oversubscription option of up to P5 billion will be available. The company also intends to offer P4.75 billion in bonds as the fourth and final tranche of its existing P50-billion debt securities program, which received approval from the commission in 2021.

If the oversubscription option is fully exercised, Ayala Land stands to raise as much as P21.73 billion from the offering. These funds will be used to refinance short-term loans and support capital expenditures.

The bonds will be offered to the public at face value from June 14 to June 20, with listing on the Philippine Dealing and Exchange Trust Incorporated scheduled for June 27.

To facilitate the offering, Ayala Land has enlisted the services of BDO Capital and Investment Corporation, BPI Capital Corporation, China Bank Capital Corporation, East West Banking Corporation, First Metro Investment Corporation, RCBC Capital Corporation, and SB Capital Corporation as joint lead underwriters and bookrunners.

Ayala Land’s net income grew 42% to P4.5 billion in the first quarter of 2023, while consolidated revenues went up 26% to P30.9 billion. – Rappler.com

The company said that as it seeks Licht’s replacement, it has put in place an interim leadership team including Amy Entelis, executive vice president of talent and content development; Virginia Moseley, EVP of editorial; and Eric Sherling, EVP of US programming, as well as David Leavy, chief operating officer, on the commercial side.

The move comes less than a week after the Atlantic magazine published a critical report about Licht.

In an email to staff Wednesday, Warner Bros. Discovery president and chief executive David Zaslav wrote that the company will be conducting a wide search, internally and externally, for a new leader.

“This job was never going to be easy, especially at a time of great disruption and transformation, and Chris poured his heart and soul into it,” Zaslav wrote.

He added, “Unfortunately, things did not work out the way we had hoped – and ultimately that’s on me.”

Licht, who most recently served as EVP of special programming at CBS and executive producer and showrunner for The Late Show with Stephen Colbert, assumed his role in May 2022, replacing Jeff Zucker, who was forced to resign after failing to disclose a consensual relationship with a colleague.

Among other criticism, Licht has taken heat for the network’s decision to broadcast a May 10 town hall with former Republican president Donald Trump, during which Trump repeated falsehoods about his 2020 election loss, said that if elected he would pardon many supporters convicted of taking part in a January 6, 2021, attack on the US Capitol, and called CNN moderator Kaitlan Collins a “nasty person.”

CNN’s ratings have been sagging, even as the company attempts to get more Republican viewers. Its profit fell beneath $1 billion in 2022 and is expected to be modestly higher this year than last, at $938.6 million, according to data from S&P Global Market Intelligence. Those estimates are for the CNN networks that operate in the United States, including CNN en Español and CNN International. – Rappler.com

This is the first attempt by a drugmaker to challenge the law, which the pharmaceutical industry says will result in a loss of profits that will force them to pull back on developing groundbreaking new treatments.

Americans pay more for prescription medicines than any other country. The Biden administration’s drug pricing reform aims to save $25 billion annually by 2031 through price negotiations for drugs paid for by Medicare, the government health plan for those age 65 and over.

The lawsuit, filed in US District Court for the District of Columbia, argues that under the law, drugmakers would be forced to negotiate prices for drugs at below market rates.

Merck asserts this violates the part of the Fifth Amendment that requires the government to pay just compensation for private property taken for public use.

After the government released its roadmap for price negotiations in March, industry lobbyists and lawyers told Reuters that drugmakers were likely to file lawsuits arguing that the government is not complying with the US Constitution.

Merck called the talks with the Centers for Medicare and Medicaid Services (CMS) coercive and said it forces drugmakers to participate in “political Kabuki theater” by pretending negotiations are voluntary.

“This is not ‘negotiation.’ It is tantamount to extortion,” Merck said in the suit.

The drugmaker also argues that the law will force companies to sign agreements conceding that the prices are fair, which it claims is a violation of the First Amendment’s protections of free speech.

Merck filed its suit against the US Department of Health and Human Services and CMS, as well as HHS Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure.

“Big Pharma regularly forces Americans to pay many times what they do customers in other countries for the exact same medicines,” White House spokeswoman Karine Jean-Pierre said in a statement on Tuesday. “We are confident we will succeed in the courts. There is nothing in the Constitution that prevents Medicare from negotiating lower drug prices.”

Heavy lift

Ameet Sarpatwari, a lawyer and professor at Harvard Medical School, said in an email that Merck’s lawsuit stands on weak claims.

“The government is not coercing Merck. It is exercising its rights and responsibility to negotiate on behalf of seniors and taxpayers the prices of a small number of drugs that have already been on the market for several years,” he said.

Robin Feldman, a law professor at UC College of the Law, San Francisco, agreed that Merck will have a heavy lift convincing the courts, but said issues in this area of the law are undecided and the case is likely headed to the Supreme Court.

Wells Fargo analyst Mohit Bansal said in a research note that the lawsuit could be the first of many filed by drugmakers, who could also challenge the law for more procedural reasons.

Merck said it plans to litigate the matter all the way to the US Supreme Court if necessary.

The first ever Medicare drug price reduction process is due to begin in September when CMS identifies its 10 most costly drugs. Following negotiations on that first wave of drugs, new prices will go into effect in 2026, which could cut industry sales by $4.8 billion in that first year.

Merck’s top-selling drug, cancer immunotherapy Keytruda, could be subject to negotiations as soon as 2028. Last year, Keytruda sales topped $20 billion – more than a third of Merck’s total sales – and are expected to top $30 billion in 2026, according to analyst estimates. – Rappler.com

• Two years since its commercial rollout, Dito has outperformed telco legacy giants Globe and Smart in several categories, including upload speed, signal availability, and overall experience.
• While Dito has started to disrupt the Philippines’ telco space, auditors have flagged its massive borrowings threatening its financial viability.
• Dito’s ties with China will continue to be an issue, especially during the Marcos administration and given its evolving relationship with Beijing.

MANILA, Philippines – When businessman Dennis Uy and China Telecom placed their bid to be the Philippines’ third “major” telecommunications player back on November 7, 2018, their representatives made sure to create a spectacle.

Their bidding documents were secured with blue ribbons and were packed in rose gold and black suitcases. The other bidders who showed up had theirs in sad balikbayan boxes. Their battery of lawyers and officials comprised of Filipino and Chinese nationals filled one side of the room.

It was quite obvious that Uy and China Telecom would win the coveted frequencies. After all, they were the only ones who were qualified.

Local players PT&T and Chavit Singson’s Sear Telecom did not stand a chance, as they failed to meet basic bidding requirements. Meanwhile, representatives of Mel Velarde’s NOW Telecom showed up, but eventually backed out just before bidding commenced.

Foreign companies like Korea Telecom, Telenor, and Mobiltel were expected to join the anticipated showdown, but were no-shows too. It was heavily speculated that they were spooked by Uy – former president Rodrigo Duterte’s campaign donor – being backed by Beijing’s state telecommunications company.

Uy and China Telecom’s consortium (eventually renamed Dito Telecom) used the congressional franchise of a little-known company called Mindanao Islamic Telephone (Mislatel) to make their bid valid. The terms of reference required companies to team up with a company that held a franchise and had a proven track record of operations. Mislatel held a franchise and was supposed to operate in Maguindanao way back in 2001, but held off commercial operations supposedly due to security concerns in the area.

Adding to the curious events surrounding Dito’s win was Duterte’s decision, just days after bidding ended, to replace Eliseo Rio, who at that time, led the Department of Information and Communications Technology.

The entry of a third telco player has long been anticipated by Filipinos who have been unhappy with the internet services offered by Globe and Smart.

But even before Dito could operate and compete with the telco duopoly, its unsurprising win without a clear rival, as well as its glaring political ties, continue to cast doubt over its capabilities.

Numbers, however, would reveal that it has started to disrupt the telco space that benefited consumers.

To an extent, Dito has found some success just over two years since its commercial operations. But auditors are keeping a close eye on whether the company can outpace its debt-driven growth.

Business circles are also watching Uy’s next business move, as he sells off assets and has not received the same red carpet treatment as during the Duterte administration.

Dito catching up

Since its commercial rollout in 2021, Dito has secured 14.9 million subscribers. This is, however, just 8.9% of the over 168 million total SIM cards nationwide. Globe dominates with 86.7 million (51.6%), while Smart has 66.3 million (39.4%).

While last in terms of market share, Dito has managed to keep up and even outperform competitors in some aspects of services. According to analytics company OpenSignal, Dito is better than Globe and Smart in terms of upload speed experience, availability, and consistent quality of service.

"It is Dito, not Globe, that is giving Smart reason for concern in the Download Speed Experience category, despite Smart having won this award outright for the past 12 reports in a row. In the October 2021 report Smart led Dito and Globe (which were tied for first place) by around 10Mbps – fast forward to the April 2023 report and Dito is only 2.6Mbps behind Smart," OpenSignal said in its latest report.

OpenSignal went on to say that Dito's entry has "significantly shifted" the balance of the Philippines' mobile experience.

It took decades for Smart and Globe to achieve such service and coverage, yet Dito was able to do so in two years with just P37.9 billion (around $67 million).

Dito chief administrative officer Adel Tamano offered perspective on the matter, noting that the bigger telco networks had legacy infrastructure to wind down whenever new technology emerged.

"Essentially, we don't have a legacy system. We started with fiber connections. We started with cloud-based services. Cumulatively, all of these technologies will bring down the cost of operations."

The government's common tower policy also helped Dito in its rollout. The measure allowed multiple telco companies to use the same towers instead of building separate infrastructure. This was beneficial for all telcos, but most especially for the new player which had to catch up.

Dito has plenty of room to grow. It must do so not just for profit, it is obliged to do so. Unlike Globe and Smart, Dito must fulfill its commitments it signed off on when it bid for the frequencies.

Financial viability

Korea Telecom and what could have been its local partner, Converge ICT, handed out press releases on bidding day, saying that the conditions imposed for the bid rendered the venture “commercially unviable.”

Meanwhile, Mobiltel cited “uncertainties” that would expose investors to risks. They also had issues with the selection process and foreign ownership restrictions.

So far, Dito is bleeding to the point of auditors questioning its ability to continue as a business.

The independent auditors of Dennis Uy’s Dito CME, the publicly-listed corporate vehicle of Dito, raised concerns about the company’s ability to make enough money to stay afloat for the foreseeable future, given its massive liabilities.

Punongbayan & Araullo Grant Thornton (P&A) underscored Dito CME’s liabilities in 2022, including exceeding its current assets by P196.6 billion, comprehensive losses reaching P25.6 billion, and capital deficiency hitting P27.9 billion, as conditions that indicate the “existence of a material uncertainty that may cast significant doubt on the ability of the Group to continue as a going concern.”

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Auditors raise concerns over Dennis Uy’s Dito 

In response to P&A’s concern, the group said that it continues to “heighten its commercial operations through targeted subscriber acquisition and promotional activities aimed at increasing revenue.”

“Also, the Group will continue to efficiently implement its network roll-out plan and cost-saving measures to improve the results of operations,” the audit report said.

Dito CME also intends to do various fundraising activities in 2023, including a follow-on offering to fund telco and digital business funding requirements.

Meanwhile, Dito is relying on bridge loan facilities with Chinese banks as several of its loans have matured. Last May 27, it announced that Bank of China and China Minsheng Banking Corp. Ltd. had extended it a $1.17-billion bridge facility.

“This bridge facility is to be repaid and absorbed via a $3.9-billion project finance long-term facility currently being finalized by DitoTel’s senior management, with target closing within the year,” Dito CME said in a stock exchange filing.

Responding to questions about Dito's financials, Tamano said that they do not expect profits until 2028.

"I think you're not looking at our numbers correctly. In terms of our network, in terms of our data centers, in terms of our offices, our personnel, etc. If you will spend P200 billion in less than three years, do you expect to earn that right away? Of course not. That's why I do have a problem when there are those who put forth the opinion that, oh, Dito is at risk because they're not earning money yet. We knew that from the onset. We're not going to earn money at the start," Tamano emphasized.

"And if you know anything about China, and the Chinese mentality, they do not think in terms of business cycles, they don't think in terms of years. They think in terms of decades and centuries. And so, to be very honest about it, the audit looks only at a snapshot of a year."

Challenges and strategies

Dito chief technology officer Rodolfo Santiago said that by 2027, they expect to have a positive cash flow, or when cash acquired exceeds cash spent. A positive net income is targeted by 2028.

To achieve these, Dito will have to not only outdo competitors, but will have to also overcome image issues and wait out technological limitations.

While its services have caught up with the latest technologies, not all can avail of them. Dito SIMs use VoLTE technology, which allows voice calls over an LTE connection instead of older, legacy voice networks. Older phones that don't use this can't accept Dito SIMs. Even iPhone users can't switch to Dito, at least for now.

This June, Dito is expected to launch its postpaid services. They hope to entice users to avail of "unique" phones from China Telecom, as well as other perks that some users may be willing to spend on.

"We do offer things that other telcos can no longer offer. I'll give you a very specific one: Vanity numbers. We still have a lot of numbers. So if there is a company that wants to have a specific type of number, we still have that," Tamano said.

Growing its market share will also be a challenge, considering that people may limit their SIMs due to the requirements of mandatory registration. A valid ID, a basic document that everyday Filipinos struggle to obtain, is required to register a SIM card.

Dito is aiming to grow its subscriber base from 14.9 million to 20 million, but officials don't have a direct answer if they will be able to hit that target.

"I think it's an industry concern, but I think there's also value in that. People will value their SIMs more because of the steps you had to go through to register one. The industry will have a better view how many active SIMs really are there," Tamano said.

Dito is part of Uy's embattled empire. From a buying spree fueled by debt during the Duterte administration, Uy is currently selling assets and has, so far, avoided a default domino. Dito, which, on several occasions, has been accused of being a spying risk, is the only one with a clear lifeline from Chinese lenders. – Rappler.com

Emory Hernandez, 24, says he developed mesothelioma, a deadly cancer, in the tissue around his heart as a result of exposure to J&J’s talc products beginning when he was a baby. The company has denied that its talc contains asbestos, which is linked to mesothelioma, or causes cancer.

Joseph Satterley, a lawyer for Hernandez, urged jurors in Alameda County, California court to reject the company’s defenses and hold it responsible for his client’s illness.

“I can assure you the evidence will be very strong,” Satterley said. “Mesothelioma is a signature disease of asbestos.”

Allison Brown, a lawyer for J&J, said in her opening statement that the company went to great lengths to ensure that there were no contaminants in its talc. She said that Hernandez’s form of mesothelioma was very rare, and more likely related to a family history of heart disease and cancer.

“We have never wavered in our belief that talc is safe and does not cause cancer,” she said.

J&J subsidiary LTL Management in April filed for bankruptcy in Trenton, New Jersey, proposing to pay $8.9 billion to settle more than 38,000 lawsuits, and prevent new cases from coming forward in the future. It is the company’s second attempt to resolve talc claims in bankruptcy, after a federal appeals court rejected an earlier bid.

Litigation has largely been halted during bankruptcy proceedings, but US Chief Bankruptcy Judge Michael Kaplan, who is overseeing LTL’s Chapter 11, allowed Hernandez’s trial to go ahead because he is only expected to live a short time.

Even if Hernandez wins, he will not be able to collect on the judgment while the bankruptcy is ongoing.

Still, the outcome of the trial could influence whether other plaintiffs decide to join in the proposed settlement.

Asbestos plaintiffs are seeking to have the latest bankruptcy filing dismissed, and have argued it was brought in bad faith to insulate the company from litigation.

J&J and LTL have argued bankruptcy delivers settlement payouts more fairly, efficiently, and equitably than a “lottery” offered by trial courts, where some litigants get large awards and others nothing.

The company said in bankruptcy court filings that the costs of its talc-related verdicts, settlements, and legal fees have soared to about $4.5 billion. – Rappler.com