Internal conflicts at CP Group

CP Group is facing internal conflict as its retail unit opposes its plan to restructure its financial business.

CP All, the operator of the 7-Eleven convenience store chain in Thailand, has not approved the financial business restructuring plan proposed by its parent company. Photo: Bloomberg .

CP All, the operator of the 7-Eleven convenience store chain in Thailand, has opposed a restructuring plan for its financial business proposed by its largest shareholder, Charoen Pokphand Group (CP Group). This development highlights internal conflict within one of Thailand's largest conglomerates, according to Nikkei Asia.

CP All is scheduled to hold an extraordinary general meeting of shareholders on May 29 (local time) to vote on the aforementioned restructuring plan. The vote is seen as a test of the independence of a listed company, which is part of the ecosystem of a large family-owned conglomerate in Thailand.

At the heart of the dispute is CP Group's plan to establish a digital bank. Last year, the Bank of Thailand granted the first three digital banking licenses to CP Group and two other consortiums. However, to enter this sector, the Bank of Thailand requires applicants to consolidate all financial activities and separate them from non-financial activities to avoid conflicts of interest.

CP All currently owns three subsidiaries operating in the financial sector. To meet regulatory requirements, CP Group intends to separate these three entities from CP All and transfer them to the management of its own financial company, ACM Holding.

On April 17th, the independent board members of CP All passed a resolution opposing the group's plan and decided to bring the matter up for discussion at an extraordinary general meeting of shareholders.

In a filing submitted to the Stock Exchange on the same day, CP All stated that its three financial subsidiaries play a crucial role and are closely linked to the company's core business operations, serving as a key mechanism to enhance competitiveness, generate revenue, and support growth for the 7-Eleven store system. The company also warned that the restructuring could reduce operational flexibility and increase legal complexity.

For example, the subsidiary Counter Service provides payment services at 7-Eleven stores and is closely integrated with CP All's operations. According to local media, these three financial subsidiaries contribute approximately 20% of CP All's total profits. Separating them from the parent company would significantly impact business operations.

Following the announcement, CP All shares briefly fell by as much as 5% compared to the previous day's closing price.

On the part of CP Group, the conglomerate argues that entering the banking sector will help them develop financial services based on customer data collected from their entire business ecosystem. A leader of the group stated at the end of April that CP Group was compelled to comply with requirements from the Bank of Thailand.

At the shareholders' meeting last weekend, the restructuring proposal would only be approved if it received at least 75% of the votes from attending shareholders. Companies belonging to CP Group, which currently hold a total of 36.2% of CP All shares, will not be entitled to vote due to their direct vested interest in the voting outcome.

Analysts view the likelihood of this proposal being rejected as quite high. Phillip Capital Securities stated in a May 14th report that a majority of shareholders are unlikely to approve the plan, therefore CP All's business operations and profit forecasts will not be affected.

Meanwhile, Yuanta Securities also expressed a similar view in its April 21 report, stating that the majority of shareholders would vote against the proposal due to concerns about declining profits and the impact on business flexibility.

Currently, CP Group's key listed companies include CP Foods, CP All, and True Corporation.

This internal struggle reflects the prevalent corporate model in Thailand and many Southeast Asian countries, where founding families still maintain de facto control over listed companies. A 2022 survey by the Stock Exchange of Thailand found that 451 listed companies, representing 57% of the total number of companies on the market, were owned by founding families or relatives holding at least 20% of the shares. The number of family businesses in 2022 was 43% higher than in 2017.

The Organization for Economic Cooperation and Development (OECD) has also expressed concerns about the excessive control exerted by families over Thai businesses. In its 2025 Thailand Capital Market Assessment Report, the OECD noted that many listed companies are family businesses, where founders and relatives still hold significant control.

The organization argues that the strong presence of family-owned conglomerates or groups of companies that control each other necessitates improvements to Thailand's corporate governance framework.

Source: https://znews.vn/mau-thuan-noi-bo-tai-tap-doan-cp-post1654629.html