TPI debt workout hits further strife

Former TPI chief executive Prachai Leophairatana is fighting a bitter battle with executives over a debt workout

BANGKOK, Thailand (CNN) - - Thai police have charged executives from debt workout firm Ferrier Hodgson with alleged labor breaches.

The Australian-owned company is overseeing the rehabilitation of Thai Petrochemical Industry pcl, Thailand's biggest corporate debtor.

The charges were initiated by the former TPI chief executive officer, Prachai Leophairathana, whose family held a controlling interest in the company until recently.

They reflect the bitter ongoing struggle between the current and former management of TPI.The company was declared bankrupt last year with debts of $3.8 billion.

Prachai dismissed in December

Prachai was dismissed in December by Effective Planner, the Ferrier Hodgson subsidiary appointed by the Thai Bankruptcy Court to rehabilitate TPI.

Prachai has responded with a series of criminal and civil suits against the Ferrier Hodgson executives.

In the latest development, Effective Planner chief Tony Norman and three other executives were charged by Thai police Thursday under the Thai Labor Act for allegedly breaching the areas of work allowed by their official permits.

Norman was charged with paying TPI staff a bonus in January, while three other executives face charges of calling a management meeting in April.

The charges bring to 18 the number Prachai has filed against Ferrier Hodgson management as part of the former TPI chief's efforts to regain control of the company.

Earlier charges dismissed by courts

Four of those charges have already been dismissed by Thai criminal courts and the Official Receiver within the Bankruptcy Court.

The Thai Bankruptcy Court awarded Effective Planner the right to carry out the debt restructuring process, due to be completed by December 2004.

Board of Investment documents forwarded to Effective Planner support the rights of the Ferrier Hodgson executives to undertake their work within the TPI workout.

"It seems to be an attempt to run the same process by the police process than through the court processes," Norman said.

The Southern Bangkok Criminal Court earlier this month dismissed a criminal suit filed by Prachai in March.

Embezzlement claim over corporate security

Prachai has also charged Effective Planner with the embezzlement of $467,000 (21 million baht) paid for corporate security arranged by Australian couple Kerry and Kay Danes.

The Danes are now being held in jail in Laos over allegations of theft from a gem mining company where Kerry Danes was responsible for security.

Effective Planner executives are also facing charges brought by police acting on orders of a parliamentary committee.

Norman said the latest move indicated a "contempt for the processes" and represented "additional harrassment of me and my people".

He acknowledged Prachai's legal manoeuvers were having an impact on steps to raise US$100 million in working capital.

"This could have cost TPI dollars. It's irresponsible and should be stopped," Norman said.

He said while he was willing to follow due legal process, "abuse of the process is not good for the reputation of the country in my opinion, and needs to be stopped".

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