GL Seizes Opportunity of Baht Slump to Adjust Its “2017FS” Resulting in Decreased Lost

GL takes advantage of Baht’s slump to revise books, pushing new financial statement with decreased losses.

Reporters disclosed that Group Leasing PCL, or GL closed at 6.65 Baht, an increase of 1.50, or 29.13% this morning half of the market (1 Aug). The ceiling high closing number is assumed to be from speculative buys after the company disclosed their revised financial reports as follows.

In accordance to the Office of the Securities and Exchange Commission (the “SEC”) inquiry for Group Lease PLC, or GL to amend the company’s Financial Statement, form 56-1, and form 56-2, immediately due to some loan receivables have raised questions by the SEC.

The Company has complied, and made internal reviews into the questioned transactions in relation to the loan receivables, and outsourced accounting and legal advisers to look into the transactions and counter parties. Afterwards, professional auditors reported that no exception to the disputed loans were found. However, GL’s Audit Committee took it in to consideration and decided to revise the financial statement as requested by the SEC in order to avoid any repercussions to the Company’s operations, shareholders and any other concerned parties.

Group Lease PCL (“the Company or GL”) has reissued its financial statement for 2017 and revised the disclosure of the “loans receivables” that are in dispute in a separate clause as “disputed loans”. That said, the Company wants to clarify the operating result for the year 2017 for the consolidated and separate financial statements as follow:

Derecognizing all income from interests from disputed loans which resulted in decreased income from interests in 2016 and 2017, then adjusting the interests paid by borrowers into payments towards the principal. This results in a decrease in earnings from interests for 2016 to Baht 233.78 million, and for 2017 to Baht 177.25.

From the Company’s derecognition of all income from the mentioned loans and recording the payments from all debtors as payments towards the principal, results are that the net amount of the lended principal’s on December 31 2017 have decrease. The Company’s allowance for expected losses from unpaid principals and interests were accounted in as expenses. The amount of outstanding lended principals decreasing would lower the allowance towards expected loss in the disputed loans to decrease as well. Therefore expense incurred by the allowance on disputed loans decreased by Baht 392.74 million.

Overall, the decreased income deducted with decreased expenses balances with the previous financial statement. However, the difference is the exchange rate at the time of each evaluation.

In 2016 net income decreased by Baht 233.78 million, but net income in  2017 increased by Baht 215.50 million. In 2017, stake to shareholders dropped on year’s end of 2016 by Baht 236.8 million while there were no changes on year’s end of 2017.                                                         

From observing the comparison between the original and revised financial statements for 2017, especially concerning the recognition of receivable income from interests, and the adjustment of all received interest payments to principal repayments instead. It can be assumed that GL has taken advantage of the difference in exchange rates in calculating the consolidated financial statements in order to increase the company’s net income, and lower net losses.

The exchange rate at the time of the revised financial statement in 2017, which was released early 2018, was at 31.00 – 31.50 Baht/USD, but currently, on 1 Aug 2018, the Baht is moving at 33.00 Baht/USD.