Beleaguered Energy Earth Plc, an SET-listed local coal trader, is suing Thanachart Bank (TBank) for 60 billion baht on the allegation that the bank endangered the company's confidential information.
The lawsuit has raised a slew of questions at the Stock Exchange of Thailand and among analysts, who are asking for further declarations from the company and questioning the governance and ethical standards of financial institutions.
Energy Earth began the legal process on Monday of last week, according to chairman and chief executive Khajohnpong Khamdee.
Among other things, Energy Earth claims that TBank allowed other parties to access the company's private and confidential information, causing substantial damage to the company.
Mr Khajohnpong said the bank's infringement made the company's creditor, Krungthai Bank (KTB), suspend its money in a TBank account.
He said Energy Earth may also file criminal charges against TBank later.
"We all know that trust is the most important thing for operating a banking business," Mr Khajohnpong said. "However, the actions of TBank proved that it lacks business ethics by breaching our private information."
He said the account seizure meant that the company failed to transfer money to support a business plan in China.
Mr Khajohnpong said that executives of TBank, which is also a creditor of Energy Earth, have close ties with KTB executives, and that the relationship led to the leak of the company's private information and subsequent credit seizure by KTB.
For its part, TBank said in a statement that the bank will counter with criminal and civil lawsuits against Energy Earth.
The bank said that it has clear and strict policies and procedures for keeping customer information confidential and that the freezing of Energy Earth's account was done to comply with a court order.
Energy Earth has cash in KTB accounts totalling US$12 million (399 million baht) and 800 million baht in a TBank account. The money in the accounts at the two banks was due to be transferred to China for operations there.
Mr Khajohnpong blamed the credit seizure for Energy Earth's worsening debt crisis. The company's liquidity has been drying up since its default on bills of exchange (B/Es) worth billions of baht in recent months.
Mr Khajohnpong denied that it was a failure or mismanagement of the company that led to the B/E defaults.
Energy Earth has total assets of 31.8 billion baht and total liabilities of 46.5 billion baht, according to the company's revised statement submitted to the SET and released on Aug 1.
Of Energy Earth's total debt, 11 billion baht is owed to financial institutions, 5.5 billion stems from bond issuance, 2.4 billion is from B/Es and 938 million is from trade accounts payable and other payables.
The company also owes 1.21 billion baht for short-term loans offered through its subsidiaries, while 26 billion is for provisions of contingent liabilities.
Mr Khajohnpong said he still hopes to be appointed by the Central Bankruptcy Court as the leader of the company's debt rehabilitation plan, adding that Energy Earth still has strong potential and is keen to operate coal business to seek for more profit and solve the debt problem.
Mr Khajohnpong said that with access to its credit line, the company could achieve total sales of 100 billion baht by 2020. He said Energy Earth still has a remaining credit line from Kasikornbank.
Charnchai Kongthongluck, chief executive of Trinity Securities, said the case of a public company filing a lawsuit against a bank that is also a creditor is unusual, catching the eye of analysts who believe the case could set a new standard.
Mr Charnchai said the court verdict in the case would be something that Thai financial institutions could learn from in the future.