Integrated transport solutions provider 2GO Group, Inc. is restating its financial statements in the last two years following a new audit by its new management that showed significant differences in reported and audited incomes.
In a disclosure to the Philippine Stock Exchange (PSE), 2GO’s new corporate secretary and corporate financial officer Elmer Serrano said the new board of directors on July 7 approved the restatement of the corporation’s audited financial statements covering the period 2015-2016.
Newly installed president and chief executive officer Dennis Uy said in a statement that “soon after we took over the management of the company, we engaged SGV and Company to audit the company’s Balance Sheet and Income Statement as of the closing date to ensure fair presentation of financial statements and establish accountabilities.”
“The audit revealed certain accounts in the previously audited financials required restatement, and the new management, with the support and approval of the newly elected members of the Audit Committee and Board of Directors, agreed to restate prior period financial statements to reflect fairly the state of the business,” Uy added.
“The potential of 2GO to grow and be a major player in this dynamic shipping and logistics industry remains intact. The restatement is a commitment of the new management and Board of Directors to raise corporate governance standards in the company,” he said.
The new management of 2GO took their seats earlier this year after Uy’s Udenna Corp. filed a lawsuit against the former’s parent firms for blocking the latter’s entry into the transport services provider. Udenna’s shipping arm, Chelsea Logistics, is acquiring 32% of 2GO’s shares. Meanwhile, holding company SM Investments Corp. this year bought 34.5% of 2GO’s parent firm, Negros Navigation Corp.
2GO said it will be filing in the coming days a summary of items being restated and the particular reason for the restatement. It added that it will make the necessary amendments to its filings with the PSE, as well as coordinate with the Securities and Exchange Commission on the filing of the restated financial statements.
According to the restatement attached in 2GO’s disclosure, net income in 2015 was only P109.131 million, as compared with the previously stated P1.081 billion. For 2016, the restated net income is P344.035 million, as compared with the P1.339 billion reported previously.
With the restatement, 2GO also postponed its annual shareholders’ meeting, and discontinued the services of all advisers to the corporation’s board of directors, including that of former 2GO president Sulficio Tagud, Jr.
The board also approved the appointment of William Charles Howell as the new chief financial officer and treasurer, replacing Jeremias E. Cruzabra who has resigned.
The trading of company shares was halted on July 10 and 11 and has resumed on July 12.
