Nestlé-Mahagitsiri dispute: Court rejects advisory firm appointment to manage assets
Nescafé saga: Mahagitsiri family wins as court rejects Nestlé's request to appoint asset management firm due to lack of expertise in shareholder disputes.
The ongoing dispute between Nestlé and the Mahagitsiri family continues, following Nestlé's termination of its agreement with Quality Coffee Products Co., Ltd. (QCP) to produce Nescafé in 2021. The termination, confirmed by an international arbitration ruling, effectively ended the contract on December 31, 2024.
Since the termination, the shareholders of both parties have failed to reach an agreement regarding the future operations of QCP, leading to legal actions throughout the year.
In response, Nestlé appointed Grant Thornton Specialist Advisory Services Ltd. to manage the assets of QCP.
However, in a recent ruling, the South Bangkok Civil Court rejected Nestlé’s request to appoint Grant Thornton as the temporary administrator for QCP’s assets during the ongoing dispute between the two shareholders.
The court cited concerns over Grant Thornton's neutrality, as they had been contacted solely by the claimant (Nestlé). Although the firm has experience in corporate restructuring, the court noted that it had never handled cases involving such severe shareholder conflicts.
The court has ruled that the appointment of an external manager for QCP is currently unsuitable. However, to protect the rights and interests of the claimant’s shareholders, the court ordered the opposing directors to prepare monthly financial statements—including income and expenses, as well as assets and liabilities—and submit them to the court, along with copies to the claimant, by the 15th of each month, starting from March 2025.
Previously, the Min Buri Civil Court issued a temporary injunction allowing the opposing directors to use the majority vote, bypassing the company’s regulations that required 5 out of 7 votes. This decision allows the opposing side to control the company’s operations going forward.
Furthermore, the court decided to suspend Ramon Mendivil Gil, the claimant’s representative and managing director, who had ordered the closure of the factory. This allows the opposing side to resume operations and more effectively monitor the company's expenditures.
This ruling ensures that the opposing side can continue managing QCP and producing coffee for the Thai market.
