SECOND-QUARTER EARNINGS
Recalcitrant units delay TPI results
Piti says management teams at five subsidiaries are refusing to hand over their financial results
Thai Petrochemical Industry Plc (TPI) has asked for approval from the Stock Exchange of Thailand to submit only a non-consolidated financial result for the second quarter, following resistance from old management teams in subsidiaries who are refusing to hand over their results.
Listed companies are required to submit non-consolidated and consolidated results within a specified time frame, or risk having their share trading suspended with the posting of an "SP" sign.
TPI president Piti Yimprasert said the boards of directors at five subsidiaries had failed to cooperate with the new shareholders of the parent company.
They have not yet submitted their financial results and this means TPI cannot complete the consolidated results.
However, he said the consolidated results should be supplied to the stock exchange after TPI completes the registration with the Commerce Ministry of new boards at the five subsidiaries.
"We are taking over the five subsidiaries' boards of directors as soon as possible," he said. "So far, we have been unable to do anything - even to call for a shareholders' meeting to change the directors."
The consent of at least two directors is required to call for a shareholders' meeting. However, according to Piti, PTT Plc and its partners, who took over a majority stake in TPI, have been represented by two directors at only two of the subsidiaries and only one director at the remaining three.
As a result, TPI exercised its legal right as the major shareholder of the five companies to call for a meeting on July 5. A resolution to revamp the subsidiaries' boards has been presented to the Commerce Ministry, but the registration of the new boards is not yet complete.
"If we have problems with the registration of the new boards, within three or four months we will stop supplying raw materials to the subsidiaries," Piti said.
TPI's founder, Prachai Leophairatana, has retained control over the boards of the five subsidiaries. He was recently voted out as a director of TPI.
Piti said that of the five units, only TPI Oil Co Ltd and Thai ABS Co Ltd are operating, and both have been relying on raw materials supplied by TPI.
TPI is ready to terminate the supply within three or four months, after hearing from the Commerce Ministry. "We won't wait for one or two years. We can handle this immediately, but so far we have done nothing because we don't want to lose the clients," he said.
TPI Oil's revenue is between Bt1.5 billion and Bt2 billion a year. About 70 per cent of it comes from supplying oil to the fishing industry and the rest from retail stations.
Thai ABS's annual sales are about Bt10 billion, Piti said.
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