Energy Absolute plans complaint over Nex Point stock sell-off concern

Clean energy company Energy Absolute (EA) announced on Wednesday that it will file a complaint about an abnormality in stock trading as mass sell-offs of  EV maker Nex Point’s shares had triggered an impact on its investors’ confidence. 

The move comes after the shares of Nex Point, in which EA holds a 33.14% stake, dropped sharply over negative views on the electric vehicle (EV) maker’s first-quarter performance and rumours of a dispute between the two firms.

According to the Stock Exchange of Thailand (SET), Nex Point’s shares dropped to 2.12 baht per share at closing on Wednesday, marking a 10.17% decline from 2.36 baht per share on Tuesday.

Meanwhile, EA’s shares dropped 4.74% to 20.10 baht apiece on Wednesday compared to 21.10 baht at closing on Tuesday.

EA CEO Somphote Ahunai told the press that the drop in shares was due to short selling, naked short selling and robot trading by speculators.

Robot trading can trigger negative sentiment in the stock market as it helps investors perform transactions automatically, he said.

He added that investors performed short selling and naked short selling with the companies’ stocks using non-voting depository receipts to conceal their transactions. 

Somphote explained that this way of trading stocks adversely affects the confidence of EA and Nex Point stakeholders when it comes to business growth and services.

“Many countries have suspended short selling as it is not a creative way of stock trading,” he said, adding that SET should suspend this trading method until it can close a short-selling loophole between stock custodians and the trading system.

He said EA and Nex Point are collecting evidence to file a complaint with the Securities and Exchange Commission and the Department of Special Investigation about Article 244/3 of the Securities and Exchange Act BE 2535 (1992) being violated.

“This move aims to enhance standards of the Thai capital market and protect SET-listed companies from becoming victims [to short selling and robot trade],” he said.

Short selling is a stock trading method that allows investors to borrow stocks from brokerage firms for trading to speculate profits. Naked short selling is slightly different as investors can trade shares without borrowing, which is illegal in many countries, including Thailand.

Article 244/3 of the Securities and Exchange Act stipulates that no person shall take any of the following actions: 

• Place a trading order or trading securities in such a way that misleads other persons regarding the price or volume of the securities trading.
• Place a securities trading order or trading securities on a continued basis with the intent to cause the price or the volume of such securities trading to be inconsistent with the normal market condition. 

 

Restoring confidence

In a bid to restore confidence among Nex Point stakeholders, the company has increased its registered capital to 10.85 billion baht by offering 8.83 billion shares.

The first set of 75 million shares at 2.55 baht per share and 75 million warrants, of which one warrant can be claimed for five stocks at 12.75 baht per share, will be offered to Nex Point CEO Khanist Srivajiraprabha and the company’s business partners.

Meanwhile, the second set of stocks at 1 baht per share will be offered to existing shareholders by this year, in which 2.09 billion stocks will be offered at an existing and additional share ratio of 1:1, and 6.29 billion stocks at a ratio of 1:1.5.

“Nex Point’s move to boost its registered capital will facilitate the company’s business operations along with boosting confidence among its customers and suppliers,” Somphote said.

He confirmed that Nex Point executives will show that the company is still able to operate and will ensure that all stakeholders are aware of its operation.

“As a major shareholder, we witness this problem and want to help Khanist and Next Point team because they are EA partners,” he said.

He added that a strong financial status and a leader who has knowledge, expertise and vision are crucial to driving a business. 

Strong business operation

Somphote went on to say that EA is operating three main businesses including biodiesel, renewable energy power plants, and future businesses like batteries, EVs and charging stations.

Despite the impact of rapid change in technology, he said the company has invited experts to study and seek ways to reduce the cost of battery business operations and boost the company’s competitiveness in the global market.

“EA does not produce and distribute electricity alone, there are also other businesses that support the company,” he said, adding that the company has prepared a strategy to cope with a decline in adder tariffs for clean electricity production. 

He confirmed that many businesses are likely to grow further. “We believe these businesses will generate strong revenue and profit for EA,” he said.

Somphote also vowed to continue collaborating with Nex Point to expand its domestic and international customer base and boost confidence among its business partners.

Under the collaboration with EA, Khanist said Nex Point aims to deliver at least 5,000 commercial EVs, along with expanding business growth in domestic and international markets.

The company delivered almost 600 commercial EVs to customers in the first quarter of this year, he said.

For the rest of the year, he said, Nex Point plans to take part in many projects launched by government agencies, state enterprises, universities and private agencies, such as electric buses and electric trucks.

“We are confident that these projects will enable the company’s commercial EV delivery to reach 5,000 vehicles as planned,” he added.