Stock analysts believe the Supreme Administrative Court's order that the Central Administrative Court accept a lawsuit filed by five individuals, requesting the nullification of the National Broadcasting and Telecommunications Commission's (NBTC) resolution to acknowledge the merger of True Corporation and Total Access Communication (DTAC), is just another regulatory blip.
According to True's statement on Monday, the Supreme Administrative Court's order will have no impact on True after the completion of the merger process as it was conducted in accordance with the law.
The supreme court last month overturned the lower court's ruling which earlier dismissed the filing. The upper court said that while the filing passed the deadline for lodging a complaint, the case benefits the general public. Therefore, the lower court has the authority to take the case into consideration.
According to Kasikorn Securities senior analyst Pisut Ngamvijitwong, the upper court ordered the lower court on Oct 30 last year to also accept a similar lawsuit filed by the Consumer Council.
He believes that after the central court takes the cases into reconsideration, it could take 2-3 years before ruling on the lawsuits. The losing party is likely to appeal the case to the Supreme Court, which typically spends 1-2 years before handing down a final verdict.
If the Supreme Court revokes the NBTC resolution, the NBTC will likely appoint a committee to restart the consideration process, which may take another 1-2 years. If the committee resolution turns out to be unfavourable to the private operator, this may trigger another round of litigation, which may take another 3-5 years to be concluded.
Based on Kasikorn Securities' discussions with True's management, the merger was legally completed on March 1, 2023 and the merger should be completed by 2025. As such, the retroactive exercise back to pre-amalgamation would be legally difficult.
The news about the supreme court's overturning of the lower court decision may re-ignite market concern over the legitimacy of the merger. However, the legal proceedings are likely to take years to complete.
Kasikorn Securities agrees with True's management that the deconsolidation of the merged entity seems extremely challenging, given the legitimate authority of the NBTC. It believes the NBTC should find an amicable way to satisfy the consumer groups. As such, the negative overhang from this issue should be negligible at this point.
According to Krungsri Capital Securities, it has little negative views on investing in True shares following the news.
Krungsri added that the news is not new and it will take time before the court cases are concluded.
The NBTC board voted 3:2 to acknowledge the deal in October 2022, and also issued remedial measures supervising the merger.
True said this case is a matter in the past where the Administrative Court read the Supreme Administrative Court's order on Feb 7, 2024, instructing the Administrative Court to accept the lawsuit between five customers (plaintiffs) and the NBTC (defendant).
The Supreme Administrative Court's order merely instructed the Administrative Court to accept the lawsuit by the five customers for further consideration according to the court proceedings. The lawsuit is a dispute between five consumers (plaintiffs) and the NBTC (defendant).
The company is confident that the case will not have any adverse effects on the company's business operations since the amalgamation between True and DTAC has been completed in accordance with all relevant laws and processes, similar to the past amalgamation of other public limited companies in the telecommunications business.
Furthermore, the lawsuit filed by the five customers against the NBTC addresses the same issue as the previous cases where the Administrative Court did not accept injunction petitions in similar precedented cases. The court has found that the NBTC's order acknowledging the amalgamation is in compliance with the law, and as such, there is no reason to perceive it as illegal.