TPIPL share verdict reversed
SEC considers appeal to Supreme Court
The Appeal Court yesterday overturned a ruling that would have levied a massive 6.9-billion-baht fine on TPI Polene Plc (TPIPL) for share manipulation and a three-year jail term for founder Prachai Leophairatana.
The Appeal Court dismissed a lower court verdict on the grounds that testimony from an SEC official was not sufficient evidence alone to prove Mr Prachai's involvement in releasing false information on the cement producer's share prices, which caused them to rise at the time.
The Criminal Court in 2007 fined TPIPL 6.9 billion baht and sentenced Mr Prachai to three years in jail for violating securities laws related to TPIPL's public offering of 11.1 billion baht worth of shares in January 2004.
Stern Stewart & Co, a consultant to Mr Prachai at the time, was also fined 6.9 billion baht. Chieanchuang Kalayanamitr, a Stern Stewart executive, was sentenced to three years in jail for complicity in the case.
The appeal ruling clearing Mr Prachai and the company automatically overturns the verdict against Stern Stewart and Mr Chieanchuang.
Mr Prachai said that TPIPL could now reverse the 6.9-billion-baht loss reserve it had set aside and book it as an extraordinary gain.
"We'll meet with the auditor to discuss whether we can reverse it. If so, we'll do it right away," he said.
He said he was not worried about a possible government appeal to the Supreme Court and that in any case the company was ready to act in accordance with legal procedures.
"It is very annoying. This has been too long a fight for me. I'm so tired of this dispute," he said, adding that TPIPL was still producing 9 million tonnes of cement annually just as before.
"There is nothing new [in company operations], nothing has changed. I'm no longer interested in expanding aggressively like I was before."
Previously, the company had intended to expand annual capacity to 12 million tonnes before it entered the court-supervised restructuring process.
However, yesterday's ruling helped TPIPL shares shoot up by as much as 8% on the Stock Exchange of Thailand to peak at 14.70 baht. They closed at 14.20 baht, up 40 satang, in heavy trade worth 1.33 billion baht for their highest close since November 2007.
The SET cautioned that investors study the company's information before deciding to invest in TPIPL shares in hopes of gains if the reserve for losses is reversed. It has also asked the company clarify any relevant information for investors.
An Asia Plus Securities report said that since the SEC may file a petition with the Supreme Court, TPIPL would probably hold off on reversing its loss reserve of 6.9 billion baht, which would represent 3.42 baht a share as an extraordinary gain.
"If the Supreme Court overturns the new verdict, the company will have to pay the fine after all, so TPIPL will probably wait for the case to end before doing anything with the reserve," said the report.
It said yesterday's ruling did offer the company a significant financial benefit, as the massive loss reserve had blocked it from securing new bank loans.
Over the past four years, the company has had to use its own cash to expand operations.
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