Letter to Thai Institute of Directors Association (TID) on PPS.
November 1 2019.
Thai Institute of Directors Association (TID)
CMA. Building2, 2/9 Moo 4 Northpark Project
Vibhavadi-Rangsit Road, Thung SongHong, Laksi
Bangkok 10210, Thailand
Attention K. Prasan Chuanphanich, Chairman,TID
We wish to bring to your attention what we view as a potential serious breach of CG on a MAI listed company which we have followed closely and are large shareholders in: PROJECT PLANNING SERVICE PUBLIC COMPANY LIMITED (PPS).
Over a year ago the company stated it wanted to diversify away from its core business. It then went on a long search for a suitable new property project which it identified in Phuket, Thailand. Along the way we helped the CEO on this looking for land plots as we are 30 year long residents in Phuket. Post massive due diligence PPS then found a suitable project called Yamu. PPS, then held an Extraordinary shareholder meeting in mid July 2019 and there voted overwhelmingly so approving this diversification plan along with its financing 100% approved by shareholders present, which I attended in person.
Based on this affirmation and positive press reports we and many of my members invested in more PPS shares. It was then all ratified by the PPS board on August 14th, 2019: "The Board has approved to purchase plot of lands in YAMU Cape, Phuket Province..." This board ratification and official SET news release on August 15 2019, prompted us to further increase our shareholding in this company.
Then, in a surprise move the company backed out at the last moment stating on September 18 2019 "Therefore, Chief Executive Officer has an opinion that the Company should reduce the proportion of the investment to not exceeding 10%", much against the original shareholder overwhelming favorable vote, previous board ratification and post this its press release that PPS would be the main investor in the Yamu project. But now, the CEO instead will privately or with an outside group take over this project 90% himself! PPS stock price dropped 35% since this oddity.
If this is pursued, we view this as a serious breach of CG and conflict of interest issue, i.e. for the CEO to spend all his time and the companies' effort on completing significant due diligence, only to then recommend the company not pursue it -and instead PPS's CEO taking on the project on his own. Again, we view this as a grave breach of CG.
We are long and professional investors in Thai stocks and run Thaistocks.com since 1997. We don't understand how this company can retain a 5 star CG rating and yet at the same time, as is now planned, the CEO himself take over this company sought and shareholder approved investment project -while remaining CEO of PPS!
Other large and small shareholders have also since expressed their alarm to PPS. If so pursued we view this a serious potential conflict of interest and will be horrified and state so at our leading web site and to the press. We wish to bring this grave irregularity and potential CG shortcoming & conflict of interest to your attention!
If this is pursued as is now proposed by PPS board we so challenge any assertions that CG is getting better in Thailand as you recently proclaim and in this case it surely is not.
Paul A. Renaud.
Enclosed: Copy of SET news release where CEO himself recommends PPS not pursue this project, only to then pursue it himself as he told me.