When “C.I. Group” plays the same role as “Stark Corporation,” will investors not be frightened after paying 724 million baht in advance to invest and place security money but not receiving the transfer? Business It’s so hot that the Stock Exchange has been forced to respond, fearing that retail investors will be seriously hurt. It was found that the committee members inspecting the deal had all resigned. The company explains that it has been rented and is waiting for resale. Some businesses do not have enough funds to raise funds and therefore request to pay gradually. As for many companies that are interested in buying, if it’s not worth it, they ask to cancel and get the deposit back.
Must admit that Just because of the events of Stark Corporation Public Company Limited or (STARK) that happened since then, when there were signs of something strange happening. A listed company (Ltd.) will surely make investors’ spines shiver as well.
Recently, a shocking event came unexpectedly again when C.I. Group Public Company Limited (CIG), a business operator producing cold coils and hot coils for sale both domestically. and abroad The Stock Exchange of Thailand (SET) was asked to clarify information in the financial statements for the 2nd quarter of 2023 that were suspicious on 29 Sep.
Because the said financial statement It was found that the company paid in advance for shares and deposited damage deposits for Due Diligence totaling 724 million baht, which is 84% of the company’s shareholders’ equity. Part of which is an advance payment for the entire amount of shares. Even though the said stocks are stocks that the Audit Committee has ordered to be more cautious in making transactions. And later it was found that the said deal had postponed the ownership transfer period and adjusted the investment model later.
The SET has ordered CIG to come out and explain information through the information dissemination system by October 16, 2023 and asks investors to study CIG’s financial statements and follow the company’s explanations before considering investing. This incident caused the stock’s price price which was already in a weakening direction. It’s even more difficult to find signs of recovery in the short term. From the stock price that used to move between 0.50 – 0.60 baht/share at the beginning of the year. Currently, CIG stock price is moving below 0.20 baht/share.
As for the origin of the order for the company to come out and explain, it is because CIG has submitted the financial statements for the 2nd quarter of 2023, with the auditor having an observation about the group having money to pay in advance for shares and placing a security deposit for inspection. Status of several target companies (Due Diligence)
Paid money and couldn’t get it back.
That’s because the amount has a significant impact on the company’s financial position. Because it is a large advance payment before receiving the transfer of shares/business. There is also a postponement of stock transfers and adjustments to investment patterns. Various formats
Starting with advance payment The cost of purchasing shares of Impact Green Utility Holding Company Limited (IGU) is 225 million baht (100% of the value of the shares purchased). In June 2023, CIG has adjusted its investment model to Buy shares in IGU’s Holding Company instead, which is currently under negotiation, but CIG has already paid for all shares in February 2023.
And from SETSMART news on August 8, 2022, the company informed the board of directors’ resolution to purchase IGU shares, which was higher than the estimated price of 90 million baht, even though the audit committee asked to be more careful in making the transaction.
In the next case, CIG paid an advance payment before accepting the transfer of the entire business of Good Ventures Company Limited, 260 million baht (58% of the business value), by June 2023. Most of the shares have been paid in advance. While the entire business transfer will be completed when the company pays the remaining 190 million baht within June 2024.
Place a large security deposit
As for the next case, CIG placed damage deposits for due diligence with several companies, starting with Jay Ling Solution Co., Ltd. (JLS), 42 million baht, but in July 2023 The Executive Committee has resolved to acknowledge that the company (JLS) has incurred losses, thus indirectly being at risk of the criteria for listing with the Stock Exchange. As for the independent financial advisor, it is recommended that the purchase of JLS shares be postponed and will be presented to the board again in the 4th quarter of 2023. But from SETSMART news dated 30 Jan. 2023, the company informed the board’s resolution to request approval from the shareholders. Holding shares of JLS worth 660 million baht
In addition, CIG also placed a security deposit to do due diligence for another 4 companies, 197 million baht, by July 2023. The Executive Committee resolved to acknowledge the postponement of the investment schedule/change of investment format. Originally, the Executive Committee resolved to enter into a joint venture agreement and place a security deposit to do Due Diligence for each company of 50 million baht in February 2023.
Audit committee members resign
Meanwhile, the issue that the Stock Exchange is suspicious about CIG’s operations is that in the past the company has changed the audit committee many times. At present, the Audit Committee who asked the Executive Committee to be more careful in the IGU share purchase transaction has resigned from being on the Audit Committee of the company. All 3 members of the Company currently have 2 Audit Committee members who are not complete according to the regulations. Requirements At the same time, the company has defaulted on debt repayment according to the debt restructuring agreement with the principal debt of 19 million baht, which has not yet been disclosed through the stock exchange’s system according to the criteria.
Add a major shareholder…new
As for CIG, it has been listed on the Stock Exchange since 2005 with an IPO price of 2.75 baht/share. Considering the current trading price of 0.19 baht/share, it is found that it has decreased by more than 93%. The head of the management is “Aree Phumsanoh. ”
But what is beginning to show signs of change at CIG is the increase in capital to existing shareholders (Right Offering) that occurred in March. 66, in which the “Phumsanoh Group” led by “Arisa Phumsanoh” purchased 306 million additional shares, representing 17.65% at a price of 0.50 baht per share, totaling 153 million baht, increasing the shareholding in CIG to 23.68% from the original holding. 12.10% while “Teera Phumsanoh” bought 400 million additional shares, equivalent to 23.07%, at the same price, totaling 200 million baht, increasing his shareholding in CIG to 24.46% from the original 1.39%.
Soon after, “Teera” brought out CIG shares and sold 400 million shares, or 23.07%, resulting in 12 million shares remaining, or 0.69%, but was even more surprised when the price at which the shares were sold was the same price as The newly purchased stock price of 0.50 baht/share made investors even more suspicious.
While the buyer of shares from “Teera” is “Chanyut Bunket”, a businessman who has never been news in the Thai stock market circles. No one has a clear origin. But coming to hold a large shareholding in CIG, many parties consider it to be unusual. It’s just not clear if it’s a personal investment. Or whose representative?
However, after the capital increase was completed, there was a change in the major shareholders. Many parties turned their attention to that. When a new group of investors joins forces, in what direction will CIG conduct its business?
because during that time there was news that The company is shifting its business direction. Look for new businesses to help increase strength. After the company lost continuously for many years, accumulating as much as 913 million baht.
Pay first, similar to STARK
For many of CIG’s advance share payment transactions, the auditor made an observation. considered a big knot Because it is a transaction that has the same characteristics as Stark Corporation Public Company Limited (STARK), which creates an advance payment transaction for the purchase of goods. To transfer money out of the company
Meanwhile, the money that CIG executives took out to pay in advance for the purchase of shares of 724 million baht accounted for 84% of shareholders’ equity. That’s because CIG’s shareholder structure consists of 4,248 minor shareholders, holding a combined proportion of 82.58%, meaning that the money that CIG executives transferred out to pay in advance for the purchase of shares was Almost all of it is the money of small shareholders.
Therefore, issuing this announcement to warn investors of the Stock Exchange It also points to another suspicious sign: the independent directors of this listed company. Gradually moving away. And if there is an actual error Perhaps the Stock Exchange’s investigation was too late.
Clarifies that he will not accept the transfer because he is preparing to resell.
For CIG’s explanation to the Stock Exchange It can be concluded that 1. Advance payment The purchase price of IGU’s shares is 225 million baht (100% of the value of the shares purchased). At present, the company has adjusted its investment model to purchasing shares in HALCYONASIA ADVISORS (SINGAPORE) PTE. LTD. (HCYA), which is IGU’s Holding Company, which is higher than the estimated price of 90 million baht, and CIG has paid all of the shares when Last February 2023
This is because investing in HCYA will help answer the needs of the group of companies that have plans to expand their business overseas. and have the opportunity to find new joint venture partners both domestically and abroad Because most foreign investors are more familiar with Singapore’s laws.
As for the fact that the transfer of HCYA shares has not yet been received, this is due to a group of investors interested in joining or investing. or acquire HCYA CIG has therefore postponed the transfer to avoid tax expenses that may occur if HYCA is sold to a new capital group.
Incomplete fundraising Can’t pay in full
2. The advance payment before accepting the entire business transfer of “Good Ventures” of 260 million baht or 58% of the business value is because CIG was unable to raise funds from the sale of common shares of 433.55 million baht as planned. Makes it impossible to transfer the entire business But I have requested a waiver from the seller so that I can gradually pay until the amount is complete.
Many deals canceled and gradually received refunds
3. In placing the security deposit for due diligence, CIG clarified for each company that in the case of JLS (the security deposit was paid 42 million baht), it was found that the company had a loss in 2022, causing it to be at risk even on 30 Jan. 66 The board resolved to request shareholder approval to purchase JLS shares valued at 660 million baht, but later on February 28, 2023, the company announced the cancellation of the request for shareholder approval.
Meanwhile, SSS (deposit paid 50 million baht) found accounting problems caused by the original group of executives who resigned. This made it impossible to purchase the business directly, so it was proposed that SSS and the new group of executives transfer some of the business to GV. Currently, CIG is in the process of recovering the security deposit.
For Easy Management Company Limited (deposit paid 47 million baht) is in the process of studying the cold storage system design project. This causes the investment style and transaction size to change. Therefore, additional opinions must be obtained from legal advisors and financial advisors for further consideration and approval.
As for S. Susom Company Limited (S. Susom) (deposit paid 50 million baht) engages in the business of investing in basic utilities in industrial estates. We must wait for the establishment of a new government to have someone responsible for issuing various licenses. Therefore, it is expected that the study will be completed within the first quarter of 2024 and The Winner Associates Company Limited (TWA) (deposit paid 50 million baht) operates a wholesale business of pharmaceutical and medical products. which is a business that supports JLS. When the purchase of JLS shares was postponed, the purchase of TWA shares was also postponed. It is expected to propose a new board of directors in the 4th quarter of 2023.
As a result, CIG expects to receive back almost all of the paid insurance proceeds. By October 2023, it is expected that only S. Susom will remain, which is in the process of checking the accuracy of the information. After canceling the acquisition of JLS and TWA, “Easy Manage” is in the process of receiving additional opinions from consultants, while SSS is in the process of returning the deposit.
However, these clarifications It will take time to prove that CIG will be able to solve the SET’s concerns. And do investors really get it? Because good examples like STARK have happened before. And in the past, if there were no doubts The Stock Exchange never asks about anything casually. Therefore, CIG’s clarification will be most valuable. When the actual practice takes place For investors right now, CIG is like a “hot” item. Avoid touching it with bare hands. It’s likely to be the most secure.
2023-10-08 16:20:00
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