Chatchai Yenbamroong's Letter to Shareholders proposing board spill, page-13

The letter from Chatchai Yenbamroong to TAP shareholders that has just been published on a pop-up website is an embarrassment to him, and a good reason for strengthening support for TAP’s current Board.

I’ll keep my powder dry and not dignify his letter with a detailed response at present, as it is riddled with so much nonsense that he must be “flying a kite” before the shareholder vote. This could be a case study in opportunism, as well as a master class on how not to handle conflicts of interests. Corporate Australia, keep watching.

Re. suitability to control TAP’s Board:

1. The duly appointed Operator has served a Default Notice on NGP (Chatchai) for failure to pay its (his) 10% share of the Manora Project costs.

2. The default amount is US$27 million. That suggests NGP may not even have paid any Project costs or, if any, only a trivial amount. The default must have been going on for a long, long time.

3. When a Defaulter fails to pay its bills, the Non Defaulters have to pick up the tab, as someone has to still pay the Operator’s staff, contractors etc. So, the good guys have had to unexpectedly fund NGP’s (Chatchai’s) Manora costs, on top of their own.

With the Default Notice smouldering on his desk, Chatchai realizes that people doubt his ability to manage his own private company (NGP) let alone control TAP, an ASX listed company with conflicting interests to his personal company, and obligations owed to hundreds of shareholders, especially in an environment of class actions and the like.

So, his letter comes up with this statement about the Default Notice:
“NGP considers the default notice issued to it by Mubadala Petroleum in respect of Manora to be contrary to arrangements in place between NGP and Mubadala.”

Oh, please. Anyone who has worked in the industry knows that Project joint venture agreements (such as under which NGP was defaulted) always cover payment obligations, Operator roles, expectations between the JVs. I advised Operators and Non Operators for over 20 years about this sort of thing.

You can’t have side agreements (or “arrangements” as Chatchai carefully says) between some only of the parties, and the Operator, about payments and default etc. Otherwise Non Defaulters would have no idea where they stood regarding payment, joint venture information, receipt of sale proceeds, equity interests etc. if one JV did not honour their commitments. Plus you could not get finance etc.

I can’t imagine Mubadala agreeing to such a thing and they certainly don’t seem to think there are any such “arrangements”, given they issued the Default Notice.

If Chatchai still wants to slug this out in a public vote he will be obliged, as a matter of credibility, to provide full details of any such “arrangements”, including describing precisely how they allegedly over-ride the joint venture agreement and the rights of other parties. A copy also should be registered with the regulatory authority in Thailand. I’ll bet nothing turns up…

Despite his own company’s default and others having been required to fund its bills, and despite the obvious conflict of interests, Chatchai nevertheless brazenly asks, of the TAP Board, “where is the accountability?”. Really …