Scandal at Thai Wind Concern Threatens US$2 billion IPO

Asama Thanyaphan, the 40-year-old corporate accounts manager at Thai renewable energy firm Wind Energy Holdings, posted her resignation letter to bosses on a quiet Friday afternoon in Bangkok, on the eve of this year's long Labor Day weekend.

By the time offices reopened and the company’s human relations department received her note, Asama was on the run in Laos, fearing for her safety. The unfolding scandal at WEH which her revelations exposed suggests that the founder of WEH, Nopporn Suppipat, and its new owner, Nop Narongdej, are at war over control of the company after Nopporn was forced to flee Thailand following accusations of lese majeste.

Asama’s resignation letter — which she also sent to all of the privately-held company’s major shareholders — contained serious allegations. KPN Group, which acquired Wind Energy in June of 2015, allegedly made irregular withdrawals of Bt300 million (US$8.67 million) from the wind power firm’s accounts, Asama wrote, enclosing copies of bank statements as evidence. Worse, she said, she had been ordered by her managers to falsify the accounts in order to conceal the withdrawals from shareholders.

Auditors Resign

KPMG, the external auditor for WEH, resigned shortly afterwards, refusing to endorse the 2015/6 accounts. For WEH and its new owners at KPN, this was much more than a minor inconvenience. The wind power company was supposed to be close to a US$2 billion IPO, already delayed from its original target date of Q1 2016. Without an audited annual financial statement — or even an external auditor — WEH had no immediate prospect of going public. The IPO was stalled.

More than four months after her decision to become a whistleblower, Asama says she and her family are being harassed by people working on behalf of WEH management. As a result, she has begun talking to the media.

“I’m speaking out because I’m concerned about the safety of my family and the repeated violations of my privacy,” Asama told Asian Sentinel. “Men working for WEH have made menacing calls to my mother and my husband, and they are trying to intimidate me by saying they can track my movements via my mobile phone signal and my immigration records.”

Firm’s Funds Diverted to Gifts

Asama says she became concerned about irregular withdrawals from the WEH account by the company’s new managers in late 2015. There were also concerns that KPN Group President Nop Narongdej was misusing WEH funds. In October 2015, Nop Narongdej gave his mother in law a birthday gift — a new S-Class Mercedes, purchased with WEH funds.

Also, in December 2015, Nop’s wife Poruethai moved 15 staff of her company Guts Entertainment into the WEH headquarters, displacing WEH staff and causing significant discontent in the company, according to several former employees.

But the biggest red flags were the withdrawal of the Bt300 million in three instalments in late November 2015, and the subsequent instruction to conceal the transactions.

“I couldn’t accept what I believe to be irregularities in the accounts, and I couldn’t accept the distortion of facts and being told by WEH executives to manipulate the accounting records,” Asama said.

It’s extremely rare in Thailand for senior employees like Asama to reveal corporate malfeasance — the law gives whistleblowers no protection and they risk being sued for defamation — a criminal offence in Thailand with severe penalties. Nevertheless, she decided to quit her job and reveal her concerns, but initially only shared the details privately with WEH shareholders, rather than speaking out publicly.

Allegations Ignored

She was so concerned about her safety that she left Thailand immediately after resigning from WEH, going first to Laos and then Malaysia, while awaiting news that her allegations were being taken seriously and investigated. Instead, however, there has been no sign of serious investigation of her complaints, and in over the past couple of months harassment of her family has increased.

The escalating harassment may be due to the fact that WEH signed a contract in August with Grant Thornton Thailand to be its new auditor. On Friday, September 30, WEH will hold an EGM for the accounts to be approved. Asama believes WEH management want to minimize any chance that her revelations will prevent Grant Thornton from giving the accounts a clean bill of health and clearing the way for an IPO. WEH has been given an IPO valuation of at least US$2 billion by two leading US investment banks.

“I am a key witness who knows about all irregularities at WEH while I was working there,” Asama said. “So I am being intimidated because they want to show me they're powerful people and I shouldn't mess with them. Of course I am afraid, but I still want to do the right thing.”

KPN Group and WEH chief executive Emma Collins failed to respond to multiple direct requests for comment on the allegations. Ian Pascoe, CEO and managing partner of Grant Thornton in Thailand, said his firm was aware of the allegations but would not be commenting on them.

"As part of our work, we will be thoroughly investigating all allegations and providing our comments to our client,” Pascoe said. "Any questions in relation to our work should be addressed to our client.”

Broader Questions

The unfolding scandal raises broader questions about what is going on at WEH, which is Thailand’s leading wind energy firm, having already put two commercial scale wind farms into operation and with a larger pipeline of development projects than any of its rivals. In particular, why would KPN Group be putting the lucrative planned IPO at risk by making irregular withdrawals of funds from WEH?

The answer, according to sources with knowledge of the situation, lies in the strange circumstances surrounding the rushed sale of WEH to KPN Group back in June 2015. KPN is a rather unfocused little conglomerate with diverse interests in real estate and a music academy, and its announcement that it had acquired WEH surprised many analysts who doubted the Narongdej family had the financial clout to afford such a transaction.

To understand how Nop Narongdej came to own WEH, we need to go back to an evening in November 2014, when Nopporn Suppipat, founder of the wind power firm, found his life suddenly turned upside down.

Nopporn had become increasingly well known as one of Thailand’s youngest billionaires due to the success of WEH, and was #31 on the Forbes list of Thailand’s richest tycoons in 2014. He was also an outspoken supporter of pro-democracy movement, in contrast to most of Thailand’s business elite who tend to be extremely reactionary.

Enter the Prince

In October 2014, Prince Maha Vajiralongkorn, the pretender to the Thai throne, decided to divorce his third wife Princess Srirasmi and launched a purge of her relatives. Srirasmi’s three brothers, one of her sisters, her parents, her uncle, and several other relatives were arrested and jailed on charges of lese majeste for allegedly exploiting their connections to the crown prince to benefit various illicit businesses.

Nopporn was also caught up in the purge, accused of hiring Srirasmi’s brothers to intimidate a recalcitrant former business partner into reducing the debt he claimed he was owed. He fled Thailand on the same night he learned that police were about to arrest him, and was eventually granted political asylum in France.

It was no longer tenable for WEH to launch an IPO — or even to make progress with its pipeline development projects — with a political fugitive as its major shareholder. So a sale to KPN Group was rushed through without sufficient due diligence, according to senior current and former WEH employees.

KPN lacked the funds to pay for WEH, they said, and rushed to borrow via short-term bills of exchange. When this fell short, the sources say, WEH was looted for some of the funds to pay for the acquisition.

Relations between Nopporn and Nop are said to have totally broken down, but Nopporn declined to comment and Nop failed to respond to several requests for comment.

Crucial Shareholder Meeting

The focus now is on Friday’s shareholders’ meeting. Has Grant Thornton decided to approve accounts that KPMG decided were too toxic to touch, and have they decided to ignore Asama’s allegations? “It’s unusual, because usually the big accounting firms are very wary of this kind of risk,” said a senior executive at one of the Big 4 accounting firms in Bangkok. “I hope they know what they are doing.”