Somphote, Anwar in Energy Absolute Share Political Scandal
Somphote Ahunai, CEO of Energy Absolute and dubbed the “Elon Musk of Thailand,” has found himself at the center of a major scandal. His company’s share price plummeted following fraud allegations against its top executives, raising questions about political endorsements and their consequences.
Energy Absolute, a leader in renewable energy and electric vehicles in Thailand, saw its shares drop 30% at the opening bell on Wednesday. This sharp decline followed a similar drop the day before. Subsequently, the Thai Securities and Exchange Commission (SEC) accused Somphote and CFO Amorn Supthaweekul of fraud. The charges, dating back to 2013-2015, involve embezzling 3.4 billion baht through fraudulent procurement activities.
These allegations have shattered investor confidence. Energy Absolute’s shares had already fallen 76% over the past year due to cash flow concerns and profitability issues. The company’s ambitious electric vehicle ventures, funded by 17 billion baht in bonds, have yet to turn a profit despite substantial orders.
In a significant turn of events, Somphote and Amorn resigned, with Chairman Somchainuk Engtrakul stepping in as acting CEO. The scandal has not only halved Somphote’s net worth to $1.6 billion but also tainted the company’s reputation. Reports suggest that Somphote’s ex-wife, Blanca Huang, played a crucial role in exposing the fraud, further complicating the situation.
PM Anwar Ibrahim endorsed Absolute Energy and CEO Somphote in January
Adding to the controversy, Somphote met with Malaysian Prime Minister Anwar Ibrahim in January 2024. This meeting briefly boosted Energy Absolute’s share price, as Anwar endorsed Somphote and his company. Critics argue that Anwar’s endorsement was a political misstep. Afterall, it appeared to support a foreign company under scrutiny for fraud.
Anwar Ibrahim’s endorsement aimed to highlight a RM5 billion pilot project in Malaysia, where Energy Absolute planned to develop green technology and EV sectors. Anwar described Somphote as a significant player in this field. However, this move backfired, drawing criticism from those who saw it as leveraging political influence to manipulate share prices.
Despite the allegations, Somphote defended Energy Absolute’s performance, claiming their innovations and assets remain valuable. However, the decision by the public prosecutor on whether to file charges looms large. This could potentially lead to severe penalties under Thailand’s securities laws.
Energy Absolute’s board remains optimistic, planning to service its debts with cash flow from its renewable energy projects. The coming months will be critical in determining whether the company and its embattled CEO can recover from these allegations and regain investor trust. Anwar Ibrahim’s political endorsement, intended to boost bilateral cooperation, now serves as a cautionary tale about the risks of intertwining political and business interests.