Prachai wins court ruling

19-Sep-05

Prachai Leophairatana, founder of Thai Petrochemical Industry Plc, holding 25% in TPI, won a court ruling to stop changes to the company's board rules. Under the court ruling, changes to the board rules will only be able to take place after new shareholders have paid for their stock and the company has exited court debt-rehabilitation. Last month, in a move designed to remove Prachai and speed up the sale of the company, Government-appointed managers for TPI had sought to change the board rules. The move, if approved, would have granted the administrator power to immediately pick representatives from state-run PTT Plc., that plan to buy a 61.5% stake in TPI under its court-approved rehabilitation plan. As TPI is still under the management of the court-appointed administrator, the company's board of directors has no active role, therefore there is no need for the appointment of new board at this time. However, the court agreed to an amendment of the company's bylaws allowing the board to comprise no fewer than 5 members, without upper limit. Currently, the board is limited to a maximum 20 members. The court also allowed any two board members to call a board meeting, instead of giving sole authority to the company's chairman. Minority shareholders of TPI, led by Prachai, are trying to override a government-led agreement in June to sell a controlling stake of the refiner at a discount to state-controlled groups including PTT, Thailand's biggest energy company, and the Thai Government Pension Fund. The PTT-led takeover was to be completed as early as mid-September. The bankruptcy court deadline for the debt rehabilitation and sale of Thai Petrochemical is November 4. Prachai has a separate appeal pending against the Securities and Exchange Commission, which last month accused Prachai of violating securities rules and ordered him to step down as director of Thai Petrochemical, TPI Polene Plc and Bangkok Union Insurance Plc. Prachai has remained on the company boards pending the consideration of his petition.