Notes to the Financial Statements PTT Global Chemical Public Company Limited and its Subsidiaries Notes to the financial statements For the year ended 31 December 2023 110 (b) Transfer of right for the payment of raw materials legal case of the subsidiary (b.1) On 18 August 2017, Anatta Green Company Limited (“Anatta”), later changed its name to Thai Bio Innovation Company Limited, a subsidiary and Asia Capital Group Public Company Limited (“ACAP”) entered a tripartite MOU where Anatta agreed to be responsible for supplying crude palm oil to the subsidiary and ACAP agreed to provide financial support to Anatta for payment to its suppliers. On the same day, Anatta entered into a loan agreement with ACAP and transferred its right to receive payment for raw materials to ACAP, along with notifying the transfer of such claim to the subsidiary and the subsidiary has given consent to such transfer. During the 2nd quarter of 2018, the subsidiary disclosed the material event of inventory issue to the Stock Exchange of Thailand. At the same time, ACAP has demanded that the subsidiary pay for the raw materials purchased from Anatta under the transfer of claim, a total of 11 items. The subsidiary considered the documents received and clarified to ACAP that such documents were not in the subsidiary's system and did not find evidence of the delivery of the raw materials from Anatta as specified. Subsequently, on 20 August 2018, ACAP filed a lawsuit in the Civil Court, claiming Anatta and the subsidiary jointly to pay damages totalling Baht 324.65 million and 15% interest per annum. The subsidiary's legal advisor had considered the relevant facts and evidence and provided an opinion that the subsidiary is not liable for the allegation. Therefore, the subsidiary appointed a lawyer and submitted a statement to defend itself. The Court of First Instance issued its judgement on 10 June 2020, requiring the subsidiary to compensate ACAP in the amount of Baht 289.56 million plus interest of 15% per annum from the date of default until the payment is complete. If the subsidiary does not pay the said debt in full, Anatta shall pay the remaining balance. The subsidiary filed a legal appeal on 25 November 2020. On 20 January 2022, the Appeal Court upheld the judgment of the Court of First Instance. However, the subsidiary did not agree with the Appeal Court’s decision and submitted a request for a petition to the Supreme Court on 9 March 2022. The subsidiary believes that its defenses in facts, laws, and the exercising rights in court in good faith, in the end, the Supreme Court will consider evidences in the case and adjudicate the subsidiary not to be liable for payment of debts according to the judgments of the Court of First Instance and the Court of Appeal. The subsidiary also believes that evidences that the subsidiary has submitted additionally in the Court of Appeal as important evidences, directly related to the issue of the case, and is new evidence that the inquiry official in criminal cases has gathered and prepared from the investigation after the Court of First Instance decided the case, are solid evidences that will make the Supreme Court hear that the transaction documents prepared by Anatta and assisted by former employees of the subsidiary including the evidence used by ACAP for filing against the subsidiary are dishonest and unlawful acts. This is consistent with the fact that the SEC has found fraudulent acts related to inventory issue and unlawful exploitation which caused the subsidiary to be damaged. It is considered as an offense under the Securities and Exchange Act B.E. 2535. The inquiry official has made recommendation to pursue prosecution in some criminal cases and submitted the investigation documents to the public prosecutor already. Therefore, the subsidiary believes that the subsidiary has no debts to be liable to ACAP under the contracts arising from dishonest and unlawful acts. However, the subsidiary has decided to record a provision for damages from the said case amounting to Baht 444 million during 2021. 354
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