Scandal at Thai shareholder of Sri Lanka's Commercial Credit takes new turn
Oct 20, 2017 10:43 AM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Group Lease Public Company Ltd, which owns a third of Sri Lanka's Commercial Credit Plc, has been asked to re-do its accounts by Thailland's stock exchange days after its Chairman was charged with fraud by the regulator.
Thailands stock exchange said it was suspending trading in the stock, which has plunged in recent days for the second time pending the re-filing of corrected accounts.
Group Lease's chairman was charged with securities fraud over executing concealed deals, mis-appropriating assets, permitting false accounting and preparing incorrect accounts.
The exchange in a notice said the firm's loan book was exaggerated.
"Since the loan’s interest rate is approximately 14-25% per year, the interest revenue from operation is also overstated," the notice said.
The scandal blew up after a group of anonymous analysts released a detailed report on the firm and its boss was charged almost at the same time.
Group Lease hit Sri Lanka's headline after it bought a 29.9 percent stake in Commercial Credit Plc, at a steep premium to market price. A 22.7 percent stake was bought from Creations Lanka, a company which had a director in the main board of the Group Lease the auditor noted.
The stake was acquired at 2,462 million Thai Bhat and acquisition costs of 26 million Bhat, but the stock had a market value of only 1,391 million in Colombo. An independent valuer had assessed the stake at 1,600 to 1,700 million Bhat, the auditor noted. T
The auditor also said that 40 percent of the company's assets were made up of loans given to a Singapore based subsidiary, who had in turn loaned them to other parties. The interest was 38 percent of the revenue, the auditor said.
Creations Lanka, a foreign firm which had a common director with Group Lease, started buying into Commercial Credit in 2014. Commercial Credit which has been growing its loan book and deposits aggressively from arrund 2010.. (Colombo/Oct20/2017)