Last Friday, Thailand’s Securities and Exchange Commission accused Somphote, the CEO and founder of renewable energy firm Energy Absolute PCL (EA), and two other senior company officials of procurement fraud from 2013 to 2015, allegedly bringing them benefits of about 3.5 billion baht (RM453.3 million).
EA announced on Monday that Somphote, a former securities trader who rode Thailand’s EV transition to become a multi-billionaire, had resigned from his position to facilitate an investigation. He has denied the accusations.
The company he founded in 2006 fell to a 10-year low of 9.15 baht (RM1.17) when it resumed trading yesterday after a one-day suspension. It has fallen nearly 80% year-to-date, valuing it at 34 billion baht (RM4.4 billion).
In a recent Facebook post, Bloomberg said Somphote, whose net worth topped US$4.8 billion (RM22.45 billion) two years ago, is no longer a billionaire after a series of unwieldy efforts to diversify one of Thailand’s biggest renewable-power producers into a Tesla-like transport specialist.
In September 2022, Computer Forms announced it had entered into a heads-of-agreement (HOA) with Bangkok-listed EA to jointly produce and distribute electric vehicles, lithium-ion batteries and charging platforms.
EA’s decision to JV with a small-cap company engaged in printing and distributing computer forms with no track record in the EV industry was a head scratcher to many investors and market observers.
Stamp of approval
Somphote and his delegation even paid a courtesy call on Prime Minister Anwar Ibrahim on Jan 5, 2023, and briefed him on the JV project. Immediately following the visit, Anwar shared about EA’s visit on his X and Facebook accounts.
Anwar wrote that EA will collaborate with Computer Forms to develop green technology in Malaysia and EV technology transfer, among others.
He added the company will build an EV manufacturing facility for electric buses, cars, motorcycles, boats, trains, EV batteries, etc, worth a whopping RM5 billion.
Later the same day, Computer Forms announced in a Bursa Malaysia filing that it had entered into a joint venture agreement with EA’s subsidiary, EA Mobility Holding Co Ltd, to establish a 50:50 JVCO.
Shares supercharged
In January 2022, the company was hovering around the 60 sen level but following news of the HOA in September 2022, the shares ran up to around RM1.40.
The viral news of Anwar’s tweet and Facebook post about Somphote’s courtesy call supercharged it to a new all-time high of RM2.96 on Jan 6, valuing the group at RM793.3 million.
However, despite the positive news flow, investor interest in the stock did not last very long. By late March 2023, the shares had collapsed to as low as 18 sen, a 94% crash.
It was around that time that the company’s controlling shareholder Pang Chow Huat, who held a 54.44% stake, disposed of the bulk of his shares on the open market on March 27 and 28, leaving him with a 4.49% stake.
Pang, Sanichi Technology Bhd’s founder and group managing director, had acquired a 64.97% stake in the company from tycoon Tan Hua Choon for RM79.91 million or 60 sen per share in March 2022.
The company’s 2023 annual report lists Pang as holding just a 0.75% stake. It also said that the group did not have a single substantial shareholder as of end December 2023.
Much ado about nothing
The “RM5 billion” JV with EA was announced with much social media fanfare in early January 2023 but ended with a whimper by September.
On Sept 1, Computer Forms announced in a bourse filing that it was acquiring 50 ordinary shares in the JVCO, worth RM50, representing EA Mobility Holding’s 50% equity interest.
“This development heralds a dynamic transformation within the venture, reflecting a strategic progression aligned with the evolving goals of both EA Mobility Holding and Computer Forms,” it explained.
This rather vague statement prompted Bursa Malaysia Securities to issue a query on the status of the JV following the acquisition of EA’s 50 ordinary shares, and whether the JV was terminated.
In a Sept 5 filing, the company confirmed the JV would be considered terminated once the transfer of the 50 ordinary shares was successfully completed. The transfer was completed three days later.
So, in the end, it was much ado about nothing, except maybe for the investors who paid RM2.96 for the shares in January last year.
The shares closed at 16.5 sen yesterday, valuing the group at just RM44 million.