Bangkok--Jan 25--SET
The Board of Governors of the Stock Exchange of Thailand (SET) order to delist Roynet Public Company Limited (ROYNET) from the Market for Alternative Investment (mai) on 5 March 2005. This is by virtue of section 171(4) of the Securities and Exchange Act B.E. 1992. ROYNET has violated section 56 by failing to submit its financial statements under section 56 for a long time, which is a serious violation, and negligence to comply with the SET's rules. The SET will allow investors to trade the securities of ROYNET from 3 February 2005 to 4 March 2005 before being delisted.
Previously, The SET announced on 3 September 2003 that ROYNET must remedy its qualifying status as mai Listed Company since it has delayed in submitting of its audited financial statements ending 31 December 2002 for more than 180 days and did not submit financial statements of Q1-Q2/2003. The SET also required ROYNET to submit all delayed financial statements within 1 March 2004, otherwise ROYNET will be delisted . Although, ROYNET failed to submit all delayed
financial statements , the Board of Governors of the SET had extended the deadline for ROYNET to submit its financial statements ending 31 December 2002 and 2003, the reviewed financial statements of Q1-Q2/2003 and Q1/2004 as the company's request twice within 31 July 2004 and 15 September2004. In addition, the auditor's reports in financial statements submitted to the SET must not qualify anything as follows:
1. A qualified opinion regarding the deficiencies of the company's internal controls, incomplete accounting system or a company's failure to prepare its financial statements to the required standard.
2. The auditor reserves his opinion.
3. The auditor includes an unqualified opinion.
Although, ROYNET submitted its audited financial statements for the year
ending 31 December 2002 and 2003 which auditor expressed an Unqualified Opinion with an emphasis of matters that would have major affect on those financial statements,the Securities and Exchange Commission (SEC) has rejected the above financial statements. Moreover, the SET has been informed that the SEC instructed ROYNET to amend those financial statements.
This is because the financial statements failed to comply with the General Accepted Accounting Standards and has violated section 56 of the Securities and Exchange Act B.E. 2535 (1992). The SEC has requested ROYNET's auditor to clarify related information concerning those financial statements. Moreover, ROYNET has not submitted the reviewed financial statements of Q1-Q2/2003 for more than 360 days. Therefore, the SET officially announced that ROYNET would be formally delisted from mai on 16 November 2004.
However, ROYNET lodged the appeal of delisting of its securities to the
SET and would submit all delayed financial statements and a business plan, capital increasing plan and new business plan which could implement immediately within 3 months (since 6 October 2004) If the company can not submit all documents correctly and completely within the deadline, it will accept that its securities will be delisted from the mai by the instruction of the SET. So, the SET has postponed the trading and the delisting procedure of ROYNET for consideration of ROYNET's appeal.
During 8-9 December 2004, ROYNET submitted the audited financial statementsfor the year ending 2002-2003, after the SEC instructed to amend ,and the reviewed financial statements of Q1-Q3/2003 and 2004 which the auditor expressed an Unqualified Opinion with an emphasis of matter. The amended financial statements ending 31 December 2002-2003 are significantly different from the previous version as follow:
- the consolidate of the financial statements ending 31 December 2002 show the decreasing of total asset and shareholders equity amounting to Baht 10.08 million and increasing of net loss amounting to Baht 10.08 million
- the consolidate of the financial statements ending 31 December 2003 show the decreasing of total asset and shareholders equity amounting to Baht 16.39 million and increasing of net loss amounting to Baht 6.31 million
The important items of above financial statements that have been adjusted are ROYNET recorded the loss of some assets and the expenses, which are not relevant to the company business and lacking of evidence, to be the director's creditor (original's director) which are no certainty that the company has the right to claim the original director to reimburse. The auditor of ROYNET, Mr. Anurak Lelapiyamitr,who works at BDO Richfield Company Limited, has been considered about his working for ROYNET's financial statements by the SEC.
On January 6, 2005, is the deadline for ROYNET, but it could not follow
its commitment correctly and completely. ROYNET submitted a paper of its concept of business improving, including the capital increasing plan without time frame. There is no information to present the possibility of the plan, how would it be practice, no information about its new investor. Moreover, the new business of ROYNET is only the concept that cannot practice immediately and there is no time line of process to workout. Hence, the SET has still delisted the securitiesof ROYNET from the mai, and the exchange will process as follow:
1. Announce the delisting of ROYNET and the trading period on 25 January to 2 February 2005
2. Allows trading of ROYNET from 3 February to 4 March 2005
3. Being delisted from the mai since 5 March 2005 onwards
However, the SET would like to inform that investor must carefully
evaluatethe value of the company before investing in its securities because its financialstatement , that the SEC instructed to amend, shows that as of 30 September 2004,ROYNET's shareholders equity is equal to Baht -59.34 million and the company has net loss from its operation continuously and got more debt. ROYNET has been under rehabilitation process, but the management and business of the company is still unclear. These information are very significant for evaluate the value of the company, investment decision and the changing of it's price in trading in the mai.
The SET is aware that the resumption of trading might affect the stock price,so it will temporary lift the ceiling and floor limits on ROYNET on 3 February 2005 to allow the market mechanism to work freely.
For more information, please contact the Corporate Communications Dept.:
Ladawan Kantawong Tel: 0-2229-2036 /
Kulvida Jintakawong Tel: 0-2229-2037/
Nattaporn Boonprapa Tel: 0-2229-2049 End.