April 13, 2007

Thai seafood exporter investigated for ethanol plant purchase

Thai seafood exporter Sea Horse has been asked to explain its purchase of an ethanol producer and the sale of a major stake in the company by its major shareholder.

The Stock Exchange of Thailand (SET) has instructed the company to clarify the issues, Thai newspaper The Nation reported.

In order to clarify its purchase of Boon Anake, Sea Horse has been asked to specify the names of the sellers, the number of shares and proportion sold by each seller and any relationship between each seller and shareholders, directors, executives and controlling persons of both Sea Horse and Boon Anake.

Sea Horse reported that the company's board of directors had approved the acquisition of the ethanol producer for THB 1.32 billion (US$40.8 million).

The acquisition came after a deal to purchase another alternative-energy producer, Power Energy, fell through following an SET ruling that the transaction was equivalent to a backdoor listing.

The SET now wants Sea Horse to explain whether its board of directors, took into account a possible loss on impairment of lands amounting to THB 247.69 million.

The SET has already cautioned about risks regarding the rights and locations of properties involved in the deal.

Sea Horse is required to explain how it can ensure that land purchased from Boon Anake is not inside a protected forest area and whether it has confirmation that all property purchased are outside protected forestland.

Moreover, Sea Horse must state if it has any loss-reduction policies in case the land is alleged to be protected forest area after an ethanol factory is built there.