Saturday, August 16, 2008

Cement firm ready to take B6.9bn hit

Fines drag downTPIPL's earnings

Cement firm ready to take B6.9bn hit


TPI Polene Plc (TPIPL), the country's third-largest cement maker, will set aside a 6.9-billion-baht reserve in this quarter to cover fines imposed against the company for securities violations. Prachai Leophairatana, the company's founder and director, acknowledged that the provisions would have a significant impact on the company's balance sheet and drag down its performance for the entire year.

TPIPL reported a first-half profit of 991.6 million baht, down from 1.6 billion last year. Revenues rose to 14.3 billion baht from 12.87 billion.

The Criminal Court last December sentenced Mr Prachai to three years in jail and fined TPIPL 6.9 billion baht for securities violations related to the company's public offering of 11.1 billion baht worth of shares in January 2004.

A petition by the company to reduce the sentence has already been dismissed by the court, although appeals against the judgment remain pending.

On Thursday, the Stock Exchange of Thailand suspended TPI Polene's shares pending clarification by the company on how the case would be settled. The Criminal Court also asked for co-operation from regulators in enforcing the judgment.

TPIPL, in a statement to the SET yesterday, repeated that appeals against the verdict remained ongoing.

''The company has filed its motion objecting to the order of the Criminal Court and its appeal against an order of the Criminal Court with the Appeal Court,'' said TPIPL's statement.

Mr Prachai also claimed that under the constitution, the sentence should not be able to be enforced pending a final verdict by the court.

''A defendant is not guilty until the court makes a final verdict,'' he said on Thursday.

''Since the case is still in the appeals process, the sentence cannot be enforced. The issue is now in the appeals process and under the Court of Appeal's consideration, and we just have to see what the court will say.''

A legal expert familiar with the TPIPL case noted that the company was still under business rehabilitation with the Central Bankruptcy Court.

Under the Bankruptcy Act, the company was under court protection and could not engage in activities that may undermine the position of creditors and stakeholders.

Sakesan Bangsomboon, the director-general of the Office of Special Cases under the Attorney-General's Office, said a petition had been filed with the court seeking to appoint a legal receiver to inspect the assets and enforce the judgment against TPIPL.

Mr Sakesan said Mr Prachai had the right to appeal against the petition to appoint a receiver, but that this would depend on the Criminal Court's consideration.

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