Its external auditor, Punongbayan & Araullo, an affiliate of Grant Thornton, called for a new expert appraisal, as reported by Bloomberg.
That development was revealed earlier this month in an order from the Securities and Exchange Commission (SEC), which also fined Villar Land, its chairman Villar, and other top executives a combined 12 million pesos.
The SEC order is part of an ongoing investigation following the company’s delay in filing its 2024 audited financial statements.
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Manuel Villar speaks at the University of the Philippines in Quezon city, Feb. 8, 2010. Photo by Reuters |
According to the order, the situation traces back to March, when Villar Land submitted a report saying that its board had approved the release of the firm’s financial report for the year ended Dec. 31, 2024.
In that report, the firm posted a net profit of nearly one trillion pesos, up more than 68,000% from 1.46 billion pesos in 2023, driven largely by a 1.3-trillion-peso revaluation gain.
That gain stemmed from a 366-hectare land parcel Villar Land acquired last September for 5.2 billion pesos from three of Villar’s privately held companies. The property was later appraised at 1.34 trillion pesos by E-Value Phils., an SEC-accredited firm, using the fair value model.
But Villar Land subsequently admitted the audit was still ongoing and asked the SEC in mid-April to extend the deadline to submit its audited 2024 statements as its auditor required more time to review and finalize the report, according to the Manila Bulletin.
Then in late May, it explained to the SEC that the audit was delayed as P&A had rejected the valuation of the land parcel.
The auditor requested a new appraisal report and also brought in another consultant, Crown Property Appraisal Corporation, to test the numbers. After that firm issued its expert opinion on the valuation, P&A still insisted on procuring another appraisal report.
Under growing pressure to release its audited financials, Villar Land agreed to record the land at cost instead, which resulted in a much lower valuation.
“In the interest of securing the immediate release of the 2024 audited financial statements, it had reluctantly proposed to the external auditors the use of cost basis in recording the value of the same properties,” Villar Land said in a statement last Thursday cited by The Manila Times.
Nonetheless, the firm said it stood by the fair value of the land parcel.
In the order, the SEC said it imposed the penalties on the firm and its executives for approving and releasing unaudited financial statements before the land valuation had been verified by its auditor, Forbes reported.
“There’s reason to find them administratively liable for gross negligence or bad faith [for] causing the release of public disclosure that is apparently false, inaccurate or misleading,” the regulator noted.
Villar Land’s share price has shot up since the land purchase was announced and, at its peak, the company’s market capitalization soared to 1.5 trillion pesos before trading of its shares was suspended in May.
That figure made it the most valuable listed firm in the country, ahead of long-established giants like the Sy siblings’ SM Investments and billionaire Ramon Ang’s San Miguel.
Francis Lim, SEC’s chairman, has said that further action could be taken, depending on findings from ongoing investigations.
“At stake here is the integrity of our stock market,” he said via text message.
Villar, a former senator and 2010 presidential candidate, graduated from the University of the Philippines with degrees in business administration and accountancy, and began his career as an accountant for SyCip Gorres Velayo, the Philippines’ largest accounting firm.
He later ventured into business, starting with seafood delivery before moving on to property development, where he made his fortune. Beyond real estate, he has a sprawling business empire with interests in energy, media, retail, restaurants, and a water utility.
He is currently the richest man in the Philippines with an estimated net worth of US$23.3 billion, according to the Bloomberg Billionaires Index.
However, Bloomberg noted that the sharp cut in the land parcel’s value is likely to reduce Villar’s net worth.
The property tycoon also topped Forbes’ 2025 World Billionaires list for the Philippines in April, though he fell behind the Sy siblings and port tycoon Enrique Razon Jr. in the magazine’s Philippines 50 Richest ranking released earlier this month.
