Bangkok--Sep 12--SET
The Stock Exchange of Thailand (SET) reported, “After investigating Picnic Corporation Pcl. (PICNI) and Eastern Wire Pcl. (EWC), the SET has found suggesting a relationship between the two companies, especially regarding PICNI’s income and capital sources and other links, as well as the changes in holdings of PICNI’s major shareholders. Therefore, the SET has decided to compile essential information for those who might invest in these two companies”.
PICNI’s operating report: The SET has found two interesting transactions from the report, for the Lak Si Plaza construction contract which PICNI signed with J.J. Land Development Co. Ltd. (JJ), worth THB810 mln. (approx. USD19.76 mln.). To build this plaza JJ received a loan of THB331 mln. (approx. USD8.07 mln.) from EWC, for repayment in August 2005. However, JJ failed to meet the payment deadline and still retains THB81 mln. (approx. USD1.98 mln.) in overdue loans.
EWC’s source of funds for JJ: EWC acquired the amount from a short-term bill of exchange. EWC had previously testified that it would not have problems repaying the amount because it had excess cash from its public offering in October 2004.
Relationships between shareholders and board members:
PICNI denied it had a relationship with JJ. However, on the day the construction contract was signed, one of JJ’s major shareholders and board members was Miss Orawan Kanchanachusak, who is Mr. Suriya Lapwisuthisin’s de facto wife. Mr. Suriya’s family is also a principal shareholder of PICNI. Now, even though PICNI has changed its principal shareholders to be Mr. Anukul Tangreangkiat and Mr. Chalermchai Buppha, both are still continuing to lend support to the former PICNI executives whom the Securities and Exchange Commission (SEC) had charged with falsifying PICNI’s financial and operational reports.
An additional point to be raised here is the relationship between PICNI and EWC. There are two common shareholders in the two companies; namely, Mr. Thanachai Roampan, who holds 0.8% shares in both companies, and Mr. Chairat Lapsongsuk, who hold 2% shares in PICNI and 0.8% shares in EWC.
The SET is interested in another source of PICNI’s income, a golf course construction contract for Sun City Golf And Country Club (SUNCITY) Co. Ltd., worth THB369 mln. (approx. USD9 mln.). PICNI declared that it had no relationship with SUNCITY, but on the day the contract was signed, SUNCITY’s major shareholder, Mr. Chalermchai Buppha and one of the company’s directors, Mr. Taweesup Krirkkiatisak, were both known to have helped former PICNI executives when they were charged by the SEC.
The SET has found that PICNI’s major shareholders have decreased their holdings for some time now, all of which took place before the XR (“Excluding rights”) day was announced. Comparing holdings as recorded on the share registration book-closing date of January 25, 2005, with report no.246-2 in August shows that all PICNI major shareholders had decreased their holdings. These shareholders include Miss Supaporn Lapwisuthisin (from 19% down to 11%); Mr. Thiratchanon Lapwisuthisin (from 14% down to 9%) and Miss Kanokrat Jittikulladilok (from 11% down to 5%).
SET EVP Mr. Suthichai added, “There might have been more sales, but some did not have to be included in the above-mentioned report. However, PICNI is now in the middle of the closing of its share registration book. Investors can check the latest list of eligible shareholders for share subscriptions in the firm’s capital increase via the SETSMART system next week”.
Mr. Suthichai continued, “PICNI has placed a purchase order for cooking gas cylinders from Saengthongthai Bucket Manufacturing Co. Ltd. (SAENGTHONGTHAI), worth billions of baht, even though SAENGTHONGTHAI was just established in December 2003 and has machinery and equipment worth only some THB80,000 (approx. USD1,951.22). The deal has raised doubts over how SAENGTHONGTHAI could fulfill such a big order. Queries into the matter are being made”.
While PICNI denies it has any relationship with SAENGTHONGTHAI, on the day the order was made, SAENGTHONGTHAI’s major shareholder and board member, Mr. Thanachai Roampan, held shares in both PICNI and EWC.
Mr. Suthichai went on to recommend that “All investors should closely follow any information they receive on these two companies before deciding. They should keep an eye on PICNI’s clarification statement to be submitted on September 13, so that they can utilize all the aforementioned information when deciding on PICNI’s capital increase, whose subscription and settlement dates are from September 26 - 30”.
For more information,
please contact the Corporate Communication Dept.:
Ladawan Kantawong Tel: 0-2229-2036
Kulvida Jintakawong Tel: 0-2229-2037
Nattaporn Boonprapa Tel: 0-2229-2049
Watsamon Saowakhonsathien Tel: 0-2229-2797 End.