SEC gives clear indication that the TRUE-DTAC deal’s share buyback must await clear results from NBTC

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The Securities & Exchange Commission (SEC) has come out to warn the entities set up to buy the shares of the planned merger of 2 of Thailand’s leading mobile operators – True Corporation Plc (TRUE) and Total Access Communications Plc (DTAC), that any moves to buy out shares from stakeholders to start the merger process needs to await the approval from the National Broadcasting & Telecommunication Commission (NBTC).

The SEC issued the warning yesterday (August 3) to the petition put forward by Prasan Ja-nguleuam, President of the state enterprise labour union at National Telecommunications Co., Ltd.

Prasan presented document no. 01/2565, dated 25 July 2022, which showed that SEC has ordered TRUE and DTAC, to ensure that Citrine Venture Holdings Co., Ltd. and Citrine Investment SG Pte Ltd (the share buyback vehicles) postpone the buyback of shares from shareholders opposing the deal, until a decision is reached on considerations concerning the merger of TRUE and DTAC by the NBTC. Apart from this there also needs to be clarity on the future business operations of the new merged entity.

The move by the Office of the SEC to acknowledge the issue comes after Prasan sent request to consider what the impact of the planned merger between TRUE and DTAC may have.

The matter is a continuation from July 22, 2022, when both TRUE and DTAC disclosed details of the process to buying back shares by early August 2022 from shareholders who were opposed to the merger.

NT labour unions went to submit the document to the SEC to consider postponing the share buyback of TRUE and DTAC indefinitely until NBTC had come to a decision on the merger because there has to be more clarity on the planned amalgamation of the 2nd and 3rd largest mobile phone operator in the country.

SEC’s letter to NT Labour on planned merger of TRUE/DTAC

The NT labour union saw that the move to buy back the shares ahead of the NBTC’s approval, was not correct according to the law and also according to the order of the Central Administrative Court, which had stated that NBTC had the final authority on considering approval of the deal.

NT’s labour union feels that undertaking such action as buying back shares ahead of the approval from NBTC may put small shareholders at risk from a wrong decision.

NT is also a shareholder of DTAC (holds 5.69% stake), and there was a chance there could be damage to the company of hundreds of millions of Baht.

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