News Detail
Date/Time
13 May 2022 17:19:00
Headline
Clarification of news or information requested by SET (Additional)
Symbol
ACAP
Source
ACAP
Full Detailed News
SET requests to clarify news or information
Subject : Clarification of news or information
requested by SET
Description :
-Translation-
ELCIDACAP011/2022
13 May 2022
Subject: Clarification information regarding to the Company's 2021 Financial
Statements as requested by the SET (Additional)
To: President
The Stock Exchange of Thailand
Reference to the Stock Exchange of Thailand letter no. BorJor. 162/2022 dated 8
April 2022 requested to clarify information regarding to 2021 financial
statements and additional information regarding to the Company's internal
control since the auditor has declared in the audit summary with no expression
of audit opinion due to uncertainty of many significant matters which may cause
material uncertainties that may cast significant doubt on the ability to
continue operating. As well as the Securities and Exchange Commission ("SEC")
has accused former directors and executives of the Company and associates in
total of 6 persons related to fraud and unlawful exploitation that caused damage
to the Company. In order to provide investors with complete information and be
able to make any decision, Asia Capital Group Public Company Limited ("the
Company") would like to clarify additional information as follows:
1. The Company's business operation status
Refer to the Company's 2021 financial statements, interest income was 23 million
baht with defaulted loans to other companies in the amount of 2,371 million
baht, decreased 162 million baht from 2,533 million baht in 2021. On 21 October
2021, the Company clarified that the Company has delayed new loans granted since
the Company has implemented new credit rules and risk criteria for new loans by
implement guidelines on 1 June 2020 that may cause least damage. Most of
defaulted loans are during litigation process and some cases are during process
of debt restructuring that expected to be completed within December 2021. In
addition, refer to the company's letter no. ELCIDACAP025/2021
Subject:Clarification additional information regarding to the Company's business
operation dated 21 October 2021, the Company had 7 new loans cases during
consideration in the amount of 120 million baht comprised of 3 commercial loans
with loans limit to 120 million baht and 4 personal loans with loans limit of
0.12 million baht. These new loans expected to be completed within December
2021. The Company would like to clarify as follows:
1.1 Status of 2,371 million baht defaulted loans including loans amount,
collateral value, legal status, progress of debt restructuring that expect to be
complete within December 2021, operation plan to be able to re-recognize
interest income and expected timeline to recognize interest income from
defaulted loans. Explain by each customer:
Answer 1.1
The Company would like to clarify status of defaulted loans in the amount of
2,371 million baht as follows:
Unit: Million baht
Defaulted loans Defaulted date Stop-accrued date Amount Collateral value
(Accounting value) Operation activities Defaulted loans
1.Customers with common shares as collateral 162 257
- Customer no.1
(BE receivable) 15 Nov.19 15 Nov.19 - - 1. Prosecuted on 27 Mar.20
2. The court call witnesses on 30 Sep.21 (The court canceled the appointment and
made new appointment for call witnesses on 26 Jan22)
3. Repay loans amount closed account on 22 Nov.21 Customer has settled debt with
cash and closed account according to balance of 3 BE bills and the collateral
shares have been returned successfully on 22 Nov. 21
- Customer no.2
(BE receivable) 20 Sep.19 20 Sep.19 - - 1. Prosecuted on 7 Nov.19
2. Court delivered judgement on 25 Nov.20to pay off principal in full amount
with 7.5% interest
3. The Company filedsubpoena to appoint executing officer on 16 Jul.21 (during
printing process)
4. Repay loans amount closed account on 22 Nov.21
Customer has settled debt with cash and closed account according to balance of
2 BE bills and the collateral shares have been returned successfully on 22 Nov.
21
Defaulted loans Defaulted date Stop-accrued date Amount Collateral value
(Accounting value) Operation activities Defaulted loans
2.Customers with properties as collateral 1,575 1,217
- Customer no.1 30 Jun.17 1 Jan.18 - - 1.Date request for repayment followed
preferential rights on 1 Mar.17 (according to creditor's rights), after this
customer was sued by other creditor
2.The Company bought assets at Legal Execution Department to sell on 20 Feb.21
3.Debtor requested the revocation of sale and termination of the execution,
waiting for hearing process on 30 Nov.21
4. The court dismissed the petition of customer that filed the enforcement
action on 30 Nov.64
5. The court dismissed the petition of customer to cancel the forced sales of
asset on 21 Dec.21
6. On 13 Dec.21, the debtor filed an appeal against the order in the event that
the Court of First Instance dismissed the petition to suspend the execution.
Currently, during pending an order from the Court of Appeal
7. On 19 Jan.22, the debtor filed an appeal against the order in the event that
the Court of First Instance dismissed the request for revocation of the sale.
Currently, during pending an order from the Court of Appeal
The Company has already transferred ownership of the collateral. However, the
Company has not recognized interest income from this receivable in the 4th
quarter of 2021 since the Company received payment in form of assets obtained
from the auction process at the Legal Execution Department. Moreover, the
Company has already recognized interest income since 2017.
Defaulted loans Defaulted date Stop-accrued date Amount Collateral value
(Accounting value) Operation activities Defaulted loans
8. The Company has already transferred ownership of collateral asset on 23
Feb.22
- Customer no.2 28 Mar.19 16 Jul.19 - - 1. Customer has negotiated to sell
asset to repay loans according to letter dated 30 Sep. 20 and at present, the
property cannot be sold
2. During assign lawyer to prepare notice for further litigation process. The
lawsuit is expected to be completed in the 3rd quarter of 2022. Progress will be
updated Debtor sells asset to repay loans
- Customer no.3 24 Mar.19 20 Sep.19 - - 1.The Company has transferred right to
sue to one of financial institution torequest for loans
2.Financial institution is in the process of suing for collateral enforcement,
hearing for witness will be on 9 Nov.21
3. The court postponed the appointment of hearing for witness to 6-8 Jun.23 When
financial institution finish seizing and selling collateral, the Company can
return loans to financial institution simultaneously
- Customer no.4 20 Apr.17 13 Feb.18 - - 1.Prosecuted on 1 Aug.18
2.Court judged on 28 Nov.20
3.Auction 2 times, no buyers yet (pending for 3rd auction). The last auction
date was on 20 Mar.21. Currently, during waiting for the next schedule of
auction date
When assets has been sold, the Company will receive payment in the full amount
Defaulted loans Defaulted date Stop-accrued date Amount Collateral value
(Accounting value) Operation activities Defaulted loans
- Customer no.5 18 Sep.19 19 Sep.19 - - 1.Customer informed that during
process to find joint investment with one of listed company (according to letter
dated 7 Jun.21)
2. During negotiation to restructuring loans which expect to be complete within
Dec.21, may cause customer to have ability to repay loans. Negotiation is not
completed.
3. During assign lawyer to prepare notice for further litigation process. The
lawsuit is expected to be completed in the 3rd quarter of 2022. Progress will be
updated Prosecution and execution for auction, the Company will be repaid loans
3.Customer with leasehold right as collateral 20 Nov.18 28 Jun.19 491 598 1. Not
prosecuted since the leasehold's owner who is educational institution has
transferred right to OK CASH on 15 Jul.20. The leasehold rights on land and
buildings of Community Mall, located on soi On Nut, Bangkok with lease term
began in 2015 and will be ended in 2038
2.The Company and subsidiaries has filed a lawsuit for eviction on 4 Dec.20, the
court scheduled an hearing on 23 Sep 21and postponed the hearing to 3 Nov.21
3. The court has scheduled a hearing for the prosecution's witnesses and the
defendantson 7-9 Dec.22 1.Management fee income
2.Rental fee income
3.Income from sales of leasehold right to outside person with covered loans
value
Defaulted loans Defaulted date Stop-accrued date Amount Collateral value
(Accounting value) Operation activities Defaulted loans
4.Customer within litigation process Jun.18 20 Aug.18 304 Transfer right to
receive cash from one of SET listed company 1. Prosecuted on 20 Aug.18, the
court sentenced the debtor to pay the debt on June 10, 2020.
2.On 25 Nov.20, the debtor applealed
3.The court scheduled to hear the judgment on 28 Sep.21, the Appeal court has
postponed to 20 Jan. 65
4. The Court of Appeal upheld the standing order by the lower court.
5.The Company filed a request to issue an order for the debtor to comply with
the Court of Appeal
6. The debtor submitted a petition to request permission to petition and request
permission to suspend the execution on 9 Mar.22
7.The Company filed an objection to the Supreme Court's request for permission
and filed an objection to the enforcement action on 4 Apr.22
8.On 11 Apr.22, the debtor filed a request to withdraw the execution and the
Company filed an objection to the withdrawal of the execution on 26 Apr.22.
Currently, pending for the results of the trial by the Court of First
Instance The Company has issued a warrant to appoint an executing officer to
carry out to freeze of assets
Total defaulted non-performing loans 2,371 1,815
Performance summary from the above table:
Customer group 1 : Customers with common shares as collateral
Both customers paid off loans and already closed account.
Customer group 2 : Customers with properties as collateral
Customer no.1, the Company has already transferred ownership of land
collateral to the Company
Customer group 4 : Customer within litigation process
The Company has issued a warrant to appoint an executing officer to carry out to
freeze of assets.
1.2 Summary of the decrease of 162 million baht defaulted loans including loans
amount, collateral value, payment type and recognized interest income. Explain
by each customer:
Answer 1.2
The Company would like to clarify that defaulted loans decreased 162 million
baht from repayment of 2 customers, details provided below:
Debt amount : Million baht Collateral value Type of collateral Payment
type Interest income Payment date
Principal Accrued interest Total As of 30 Sep.21 As of 30 Sep.21
Customer no.1
(BE receivable) 90.00 2.46 92.46 154.71 common shares listed in SET Customer has
settled debt with cash and closed account according to balance of 3 BE bills
and the collateral shares have been returned successfully on 22 Nov. 21
10.98 22 Nov.21
Customer no.2
(BE receivable) 70.00 - 70.00 83.55 common shares listed in SET Customer has
settled debt with cash and closed account according to balance of 2 BE bills and
the collateral shares have been returned successfully on 22 Nov. 21 11.62 22
Nov.21
Total 160.00 2.46 162.46 238.26 22.60
The Company has already received debt payment according to BEs from both
debtors in the amount of 185.07 million baht in cash on 22 Nov.21. In addition,
the Company recognized interest income in the amount of 22.6 million baht in the
fourth quarter of 2021.
1.3 The results of 7 new loans with a total credit line of 120 million baht
including loans amount, collateral value, loans period specified start-end date,
interest rate, recognized interest income and reasons of approval or rejection.
Explain by each loans customer. At present, does the Company have pending loans
for consideration?
Answer 1.3
The Company would like to clarify that the Company considered personal loans
for 4 customers in the amount of 120,000 baht which all 4 were not passed the
criteria due to credit bureau results. The resulted shown that loans applicants
has relatively high debt burden which may cause the ability to pay off the debt
in the future.
In addition, the Company has considered 3 customers applying for commercial
loans in the amount of approximately 120 million baht. All 3 customers were not
achieved the criteria. Details of each customer provided below:
- Customer 1 The company applying for loans is in the apartment rental business.
The company offerred land and building of the apartment located in Bangkok as
collateral. This customer is disqualified as the collateral is located in the
area which could affect future sales liquidity.
- Customer 2 The company applying for loans is in the construction business. The
company offerred collateral as a transfer of the right to receive money. This
customer is disqualified since it is the transfer of construction rights from
the employer to a private company, there is a risk of receiving money and there
is no asset as collateral.
- Customer 3 The company applying for loans is in property development sector.
The company offered land located in Chonburi Province as collateral. This
customer is disqualified due to the appraised value of the property is much
lower than loans limit. Loans could not be settled.
However, at present there are 2 customers pending for loans consideration,
approximately 72 million baht loans amount. Loans consideration is expected to
be finalized within the second quarter of 2022. Summary is provided as follows:
- Customer 1 The company applied for loans with a credit limit of 17 million
baht. The company is in the business of producing paper boxes and the objective
of loans is to acquire old factory
- Customer 2 The company applied for loans with a credit limit of 55 million
baht. The company is in the scrap trading business and the objectives of loans
are to refinance and working capital
1.4 The current business activities of the Company and its subsidiaries that the
Board of Directors realize that generate the main source of income, sources of
funds used in the lending business and Board of Directors' opinions
Answer 1.4
Company Income-generated activities
The Company - Expand to small and medium-sized loans with collateral
- Expand credit limit for customers
- The Company has received repayments from 2 defaulted loans in the amount of
185.07 million baht and transferred ownership of collateral from auction process
of 1 case of defaulted loans
CAPOK - During preparation to improve and develop the full lending procedure
OK CASH - Expand credit limit
- Debt restructuring
- Negotiate to reduce interest to return debt
- Collection
CIMAGE - Business activities to generate income including revenue from sales and
rental of office building, warehouse in Bangkok and vicinity area
Source of funds for business operation comes from the repayment of debts from
some debtors who repaid in form of cash and assets transferred which will be
developed or improved for further sale or rent.
The opinion of the Audit Committee regarding to business activities that
generate main income, the Audit Committee has recommended to develope or improve
assets for sale or rent.
2. Reversal of credit loss allowance
2.1 As at 31 Decenber 2021, the Company's equity was 114 million baht. Refer to
notes to financial statements no. 15, 15.3 and 32.5, the Company reversed credit
loss allowance of 2 customers which results of lawsuits are not yet finalized
in the amount of 161 million baht as follows:
SET would like the Company to explain the reasons of credit loss allowance
reversal while results of lawsuits are not yet finalized. Criteria and
information used for consideration such as opinion from expertise, potential of
lawsuits, and debtor's ability to repay loans. Please describe by each customer.
The Company would like to clarify as follows:
Customer Defaulted loans Reversal credit loss Explanation
No. 1 283.15 91.66
The debtor was subjected to legal execution and the property was sold at public
auction. The Company has already won the auction to purchase of the property and
transferred the ownership which could be considered that the debt had been paid
off. Opinion from legal advisor commented that once the assets had been
transferred, the case arising from auction sale will not affect to the Company.
Full amount of reserve has been reversed.
Litigation
19 February 2021 Debtor sued the court's judgment to the Civil Court
20 February 2021 The Company entered into a land and building purchase agreement
of collateral with the Legal Execution Department
30 November 2021 The Civil Court dismissed the petition to suspend the execution
13 December 2021 Debtor filed an appeal against the court's order. Currently,
pending for an order from the Court of Appeal
23 February 2022 The Company has already transferred right of collateral asset
and reversed the allowance in the fiscal year 2021
No. 2 304.47 68.51
The Company reversed allowance as a result of the verdict of the Court of Appeal
upheld the judgment of the Civil Court. The defendant has less chance to be
granted a petition (refer to legal opinion). The Company expects to repay loans
within 1 year. Currenlt, the Company has issued a warrant to appoint an
executing officer to carry out to freeze of assets.
In addition, debtor has started to book allowance as if acknowledge the loss
that may occur
Litigation
20 August 2018 The Company sued debtor and partner company (1) to Civil court to
repay loans to the Company
10 June 2020 The Civil Court sentenced the debtor's partner to pay the Company
290 million baht
25 November 2020 The debtor's partner filed an appeal
20 January 2022 The Court of Appeal upheld the judgment of the Civil Court and
reversed the allowance in the 2021 financial statement. Currently, the case is
during the period of exercise the supreme right. The debtor submitted a petition
to request permission to petition and request permission to suspend the
execution on 9 Mar.22
2.2 From notes to financial statement no. 32.6, The Company was sued by a debtor
for breach of contract and demand compensation for repayment for unfair
contract by paying compensation of 223 million baht with 7.5% interest rate from
the sue date. And, the company has to accept payment of 237 million baht from
debtors, and redeem the mortgage of the land and all the pledged shares to the
debtor. On 11 October 2021, the court ordered the temporary disposition of the
case since the Company has filed a request for business rehabilitation. The
Court scheduled an appointment to hear the result of business rehabilitation on
7 March 2022. Managements of the Company believe that the case does not have a
significant impact on the financial statements therefore did not record any
liabilities that may arise from such lawsuits.
SET would like the Company to explain the lawsuit that the Company was being
sued by the debtor for damages including debtor who sued the Company, reasons
for suing, value of damage that expected to be paid, progress of the court
meeting on 7 March 2022, information and criteria that Management used for
consideration to ensure that the outcome of the lawsuit may not have a
significant impact on the financial statements and that contingent liabilities
are not recorded.
The Company would like to clarify that based on notes to financial statements
no. 32.6, the Company has property collateral value which is higher that loans
value. The case that the Company was sued by debtor and asked for damages, this
debtor was ordered by the court to pay the debt to the Company and asset has
been sold out at auction by the Legal Execution Department. Whilst this debtor
delayed the sale at auction in accordance with the judicial process and also
sued the Company for unfair contract and claim damages. This is a way the debtor
fight for justice while being forced to sell at auction. From the Company's
legal department opinion claimed that the Company has not breached the contract.
The claim for damages as stated is not true in many aspects and has no right to
sue (from legal opinion dated 10 June 2021). The Company believe that the case
does not have a significant impact on the financial statements therefore did not
record any liabilities that may arise from such lawsuits. On 7 March 2022, the
Civil Court has ordered to postpone the progress report of the rehabilitation
case to 5 September 2022.
2.3 Opinion of the Audit Committee and the Board of Directors related to the
suitability to reverse allowance while the lawsuits are not finalized and not
recorded any liabilities that may occur from the legal case according to 2.1 and
2.2 respectively
From the opinions of the Audit Committee and the Board of Directors, reversal of
allowance for both debtors according to 2.1 and 2.2 are in accordance with
accounting rules and appropriate following the resolution from the Audit
Committee Meeting no.1/2022 and the Board of Directors Meeting no.1/2022 dated
25 February 2022. Once the Company has received payment, the allowance should be
adjusted. According to customer in 2.1, no.1, the Company received the transfer
of ownership of the assets from auction process at the Legal Execution
Department and customer no.2 based on legal opinion. Therefore, the probability
that the Company will receive debt repayment is quite high.
For the case that the Company has not recorded any contingent liabilities from
the lawsuit filed by the debtor under question 2.2 sued the Company. It is
confidence that the outcome of the lawsuit will not have negative impact to the
Company. This is in accordance with the legal advisor's opinion. In addition,
the Company has property collateral value which is higher that loans value.
3. Internal control system of the Company
On 11 March 2022, the Securities and Exchange Commission accused the former
directors and executives of the Company with a group of 6 persons of fraud and
unlawful benefits. Two former directors and executives committed crimes along
with 4 persons by jointly let the Company hired All Right House Co.,Ltd. as
contractor to build retaining walls and drainage pipes and Chai-ar International
Co.,Ltd. as construction supervisor. However, it was found that there was no
actual construction according to the contract but the construction cost was
already paid. Consequently, the Company had damage loss in the amount of 27.50
million baht.
From the above mentioned, preliminary considered that the Company has an issue
of internal control which is one of the qualification to maintain as the listed
company. Therefore, should clarify as follows:
3.1 Clarify the improvement of the Company's internal control system, please
explain the authority to approve the payment, payment procedure, information for
consideration and other important action for improving the internal control
system under such matters. If it is during development, please identify a
timeframe to be completed and report the progress for every quarter following
timeline to submit financial statement until the process complete
On 11 March 2022, the Securities and Exchange Commission accused the former
directors and executives of the Company with a group of 6 persons of fraud and
unlawful benefits. Two former directors and executives committed crimes along
with 4 persons. From the mentioned issue, the Company would like to clarify that
the Company was not damaged in the amount of 27.50 million baht as it was
accused since the Company received full amount in return.
In addition, the Company would like to clarify that the payment approval
authority has been improved. Refer to the resolution of the Board of Directors
Meeting no. 9/2021 dated 24 December 2021 to change the authority to approve the
purchase of goods and operation expenses on business as usual. The change of
approval authority shown in below table:
Approval Approval limit
before improvement Approval limit
after improvement
Chief Executive Office
Acting Chief Executive Office Not more than 50 million baht Not more than 10
million baht
Executive Committee 50 - 300 million baht 10 - 100 million baht
Board of Directors More than 300 million baht up More than 100 million baht up
3.2 Opinion of the Audit Committee and the Board of Directors regarding to the
sufficiency of internal control system of the Company including follow-up
results whether the operation is in accordance with the internal control system
or not
The Audit Committee has audited the internal control system of various work
systems of the Company on a quarterly basis and proposed to the Board of
Directors for acknowledgment on a quarterly basis. The Audit Committee also
advised how to improve in order to have more efficiency of internal control such
as recommend to revise operation manual on a yearly basis. Moreover, from the
Audit Committee Meeting no.6/2021 dated 20 December 2021 and the Board of
Directors Meeting no. 1/2022 dated 25 February 2022, they was resolved to
approve the internal control system and considered sufficient.
Please be informed accordingly.
Yours Sincerely,
Asia Capital Group Public Company Limited
...............................................................
(Mr. Anuchai Vitnalakorn)
Acting Chief Executive Officer
Authorized to sign on behalf of the Company
Corporate Secretarial:
02-793-3977
Signature ___________________________
( Mr. Anuchai Vitnalakorn )
Acting Chief Executive Officer
Authorized to sign on behalf of the company
______________________________________________________________________
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