SET-listed Energy Absolute (EA) has set up a committee to look into the alleged fraud committed by its former chief executive and chief financial executive, yet the renewable energy producer insisted it would go ahead with a 5.5-billion-baht bond issuance, despite the recent negative developments pertaining to the company's credibility.
Board chairman Somchainuk Engtrakul, who took over the position of chief executive after founder Somphote Ahunai stepped down from the post over the weekend, said the company's board of directors established the committee to look into alleged fraud in the procurement of equipment for the company.
Late on Friday the Securities and Exchange Commission (SEC) accused Mr Somphote and his deputy and chief financial officer (CFO) Amorn Sapthaweekul of being involved in an alleged fraud relating to the company's purchase of equipment from overseas and/or software for a solar power plant between 2013 and 2015.
A third person, Phornlert Techarattanopas, was also mentioned as being involved in the procurement, which was made through two subsidiaries. The deal resulted in the three people receiving benefits totalling about 3.5 billion baht, the SEC said in a statement.
The regulator said it has filed a case with the Department of Special Investigation and the Anti-Money Laundering Office for further legal action.
"Mr Somphote and Mr Amorn have not yet been found definitely guilty in this case, but they decided to step down to allow the committee to investigate the case for the sake of transparency," Mr Somchainuk told a briefing on Monday, adding that the committee aims to conclude its investigation as soon as possible, without setting a specific time frame.
Vasu Klomkliang, who was named CFO after Mr Amorn's resignation, said EA is going ahead with the plan to issue 5.5-billion-baht's worth of debentures and is now in the final phase of the discussions with the SEC.
The company's liabilities due in the third and fourth quarters of 2024 consist of debt from financial institutions of roughly 3.2 billion baht and bonds of 5.5 billion baht.
"With EA's current revenue of about one billion baht a month, we do not see any difficulty in repaying the existing debts and servicing new bond payments of 5.5 billion baht," said Mr Vasu.
The Stock Exchange of Thailand (SET), meanwhile, halted trading of EA stock in Monday's morning session, and in the afternoon imposed SP (suspension). The bourse also withdrew it from the ESG rating list.
"The SET asked EA to provide additional clarification regarding the financial impact that will occur due to the recent developments at the company, particularly loans and the debentures that will be due within 2024," the bourse said in a statement.
The company is also required to update the bourse with clear directions concerning the repayment of such debts as well as the impact on the company's business management.
According to the SET, EA's loans from financial institutions and debentures totalled 62.2 billion baht, representing 89% of total debt, with short-term debt totalling roughly 19.5 billion baht.
"The SEC has accused EA's directors and management along with others for fraudulent activities, which have inflicted harm upon EA and its subsidiaries. This information is crucial as it may significantly affect the financial status and business operations, including the making of decisions on the trading of EA's securities," the SET said.
"The SET has already asked the company to provide the aforementioned information, but the company has not yet added the information completely. Therefore, the SET has ordered a temporary suspension of trading on EA's securities until EA completely clarifies the information required."
The SET, through the Sustainable Investment (SET ESG Ratings) Committee, has also decided to remove EA from the current SET ESG ratings list.
"The decision was made because the company no longer meets the ratings qualification criteria, which stipulate that 'either the company or its directors or executives must not be accused or found guilty by authorities or relevant agencies in matters related to corporate governance, social impact, or environmental impact'," the SET noted.
Joining the briefing on Monday, Mr Somphote declined to comment on the charge he is personally facing.
"EA became one of the blue chip stocks not because of a miracle but it came from our intention to develop technologies and designs of electric vehicles [EV] and batteries. I have to apologise for several things that happened recently with EA that caused confusion and volatility in the market that were beyond my expectation," he said.
"It is true that the resignations are of two cogs of EA, which are myself and Mr Amorn, but the company will continue to operate with our over 3,000 employees and they don't deserve any bullying. Those who said we fell into the same fate with Stark [Corporation], I want to insist we are not Stark, given the technology and capability that we have today," he noted, referring to another SET-listed company that has been plagued by fraud.
Somchainuk Engtrakul
Somphote Ahunai