After keeping a low public profile for months, Jasmine International Plc boss Pete Bodharamik spoke out Tuesday on why his company defaulted on a 900-megahertz spectrum licence payment due this past Monday.
He filed a statement to the Stock Exchange of Thailand (SET) to explain that the failure stemmed from a lengthy partnership process involving a would-be Chinese investor.
Subsidiary JAS Mobile Broadband arranged an urgent media briefing Tuesday to clear up why it had defaulted but abruptly cancelled the briefing an hour before it was due at 2pm.
JAS said it needed to file the reasons with the SET before explaining them to the media.
Mr Pete said in the filing that JAS could not meet the national telecom regulator's payment deadline because the company's partnership agreement with a prospective Chinese telecom giant still awaited finance approval from Chinese regulators.
As a result, the issuance of bank guarantees worth 72 billion baht required to pay the National Broadcasting and Telecommunications Commission (NBTC) had been delayed.
JAS said the approval process would take until mid-April, well beyond the deadline set by the NBTC.
The NBTC has insisted it could neither extend the payment time nor relax conditions for JAS if it could not pay the 4G licence fee as stipulated in auction rules.
Mr Pete said JAS's legal consultants viewed that the NBTC should only confiscate the guarantee of 644 million baht that JAS placed before the auction without any further fines and penalties because the company did not violate any regulations governing the use of the 900MHz spectrum.
The confiscation will also have no significant impact on JAS's financial health, said Mr Pete.
Shortly after JAS submitted the filing, the SET suspended JAS's stock trading until the required information is completely disclosed.
In a separate filing, JAS said its board of directors on Tuesday approved the company's 6-billion-baht share buyback plan.
The company will buy up to 1.2 billion shares or a 16.82% stake at a price of five baht each from the stock market, it said, adding that the treasury stock is subject to approval from shareholders on April 29.
JAS's dividend plan will also be assessed by shareholders. The fixed-line broadband operator proposes to pay a dividend of 30 satang per share to shareholders on May 27.
JAS will buy back its shares from June 1-10.
TDRI urges heavier penalties
The Thailand Development Research Institute (TDRI) has called on the NBTC to impose stiff fines and penalties on JAS for its payment failure.
It also urged the regulator to call a new auction for the 900MHz spectrum within 2-3 months for the public's benefit.
Confiscating JAS's 644-million-baht guarantee plus 160 million baht in compensation for operating expenses incurred during the auction should be the norm, said TDRI president Somkiat Tangkitvanich.
In addition, JAS should be blacklisted by the NBTC from entering any future auctions or applying for operating licences.
However, Mr Somkiat said revoking all operating licences of parent firm Jasmine International, including those for fixed broadband and digital TV, might be troublesome because those companies have different management.
The NBTC does not set conditions in auction rules involving licence revocation and could face a legal backlash if it did so, he said.
Mr Somkiat acknowledged the NBTC faces a complicated task to seek compensation for losses the regulator and the government suffered due to JAS's failure.
The regulator can file a civil lawsuit against JAS seeking damages for the government, but the legal process could take years.
Mr Somkiat said the NBTC's proposal that a repeat auction for the 900MHz spectrum must begin at JAS's winning price of 75.65 billion baht was unreasonable. The winning bid was higher than the prices offered by AIS and DTAC.
"The reserve price for a repeat auction should be set at 70.18 billion baht, the last price for the spectrum slot offered by DTAC," he added.
Mr Somkiat said True should also be allowed to participate in a new auction. He also urged the NBTC to set a bigger guarantee to be placed before the auction, equal to the reserve price, in order to prevent defaults.
He called on the SET and the Securities and Exchange Commission to investigate the stock trading of Jasmine Group to ensure the companies' individual shareholders benefit.