Big business, wealth, royal connections and fines

21 03 2016

Big business supported the coup and the junta. It supported notions of anti-corruption, so long as it was elected politicians who were in the firing line. We wonder how it is doing now?

At ThailandBusinessNews it is reported that “top executives and shareholders of five companies listed on the Stock Exchange of Thailand for insider trading…”. The Securities and Exchange Commission (SEC) pursued insider trading for the second time in three months “on top managers who have abused their power in publicly traded firms for their own benefit or for their accomplices.”

Insider trading has long been normal in Thailand, as it has been in many Asian bourses and internationally as well.

In December, the SEC hit “four top executives of CP All Plc, Thailand’s biggest convenience store operator, with hefty financial penalties. For more details, see the story at AEC News Today. The company, one of Thailand’s whales and under the Chearavanont family’s Charoen Phokphand Group, ignored the fines and allowed the executives to continue in their positions. CP has long had connections with the palace but has also been wiling to bet on all sides of politics.

Now, the SEC has “fined top executives and shareholders of five companies listed on the Stock Exchange of Thailand…”. The report has details on Siam Makro:

It fined Korsak Chairasmisak, chairman of the executive committee, Piyawat Titasattavorakul and Pittaya Jearavisitkul, two vice-chairmen of the executive committee, and Athueck Asvanund, the firm’s chief legal officer, a total of 33.34 million baht for using inside information to buy shares in Siam Makro Plc.

At its website, the company has a 13-page “good corporate governance” document. Its board includes three scions of the Chearavanont family and the chairman of the board is none other than Asa Sarasin, and a board member of royal-dominated companies and other CP companies. Asa retired as secretary-general of the Office of His Majesty’s Principal Private Secretary in 2012, having held the position for 12 years.

Another hit in this bout of insider trading crackdowns is also a business whale:

On Wednesday, the regulator said it had banned Chai Sophonpanich, chairman of Bangkok Insurance Plc (BKI), from being a director at Bangkok Life Assurance (BLA) for three years for his involvement in insider trading. He has also been barred from working in capital markets for the same period. The ban took effect yesterday, but he is not prohibited from working at BKI.

The Criminal Fining Committee has imposed a fine of 500,000 baht on Chai Sophonpanich for disclosing inside information for other persons to purchase shares of Bangkok Insurance Public Company Limited (BKI).

Following a referral from the Stock Exchange of Thailand, the SEC’s further inspection has revealed that Chai, then chairman and chairman of the executive board of directors of BKI, proposed a dividend payment plan for BKI shareholders at the ratio of five existing shares to two dividend shares, on top of the normal dividend payment plan for the operating performance of 2013.

This was material information that would have supported an upward trend of the BKI share price. Chai disclosed such inside information to other persons who purchased BKI shares during 24-25 February 2014 before the information became publicly known on 28 February 2014. Such action was deemed taking an unfair advantage of other people.

The Sophonpanich family has been one of Thailand’s leading business families since the late 1940s. It operates a related family in Hong Kong, involved in banking, politics and other businesses.

Other executives found guilty of insider trading practices by the SEC were:

… Somyos Anantaprayoon, current chairman of WHA Corporation Plc, who was fined 500,000 baht for telling two newspapers — with the articles published on Oct 27, 2014 — that the company was in talks to acquire a listed company worth 50 billion baht, though such information had not yet been made public.

The Criminal Fining Committee has fined Somyos Anantaprayoon for dessiminating news that may have led other persons to understand that the share price of WHA Corporation Plc. (WHA) would rise or fall, and such information had not been disclosed to the Stock Exchange of Thailand (SET).

Following a referral from the SET and the SEC’s further inspection, it was found that Somyos, then Chairman, CEO and a major shareholder of WHA, had released news to the public through two media publications issued on 27 October 2014 with the key message that WHA was negotiating a business deal worth approximately 50 billion baht to take over a listed company that had long been established for more than 20 years in the same industry as WHA with a multiple P/E of 10.

His misconduct with regard to the dessimination of facts that had not yet been disclosed to the SET and contained material information that could have influenced investors’ decision making and the price movements of WHA shares being traded on the SET, was in violation of Section 239 and liable to the penalites under Section 296 of the Securities and Exchange Act of 1992. He was imposed a criminal fine of 500,000 baht

He’s one of the founding family of WHA. WHA has a 4-page code of conduct.

Another group hit is the family-controlled Siam Global House, with its boss Witoon Suriyawanakul listed by Forbes as entering Thailand’s richest list in 2013:

… Witoon Suriyawanakul, chairman of the management committee and director of Siam Global House (Global), and three other shareholders, who were given a combined fine of 25.3 million baht for insider trading.

The SEC found that Mr Witoon bought 8.02 million shares and 3.5 million units of warrants of Global from June 29 to Aug 23, 2012 using accounts of people who have a relationship with him in order to take advantage of inside information regarding SCG Distribution’s planned acquisition of Global. The other three shareholders were viewed as accomplices. The acquisition was disclosed to the public on Aug 27, 2012.

The Criminal Fining Committee has imposed a total fine of 25,322,064.39 on four offenders for using insider information to purchase ordinary shares and warrants of Siam Global House Public Company Limited (GLOBAL).

The four offenders are: (1) Witoon Suriyawanakul, (2) Kunnatee Suriyawanakul, (3) Apilas Suriyavanakul, and (4) Kriangkai Suriyawanakul.

All are from the founding family. The deal that was considered insider trading had a connection to the royal-controlled Siam Cement:

Following a referral from the Stock Exchange of Thailand, the SEC’s further investigation has revealed that Witoon and the three other persons in the same group purchased GLOBAL shares and GLOBAL-W warrants and gained benefits from such transactions. Witoon, who was chairman of the management committee of GLOBAL, had the decision making power over the terms and conditions of an agreement between GLOBAL and SCG Distribution Co., Ltd. (SCG), a wholely owned subsidiary of The Siam Cement Public Company Limited, with regard to SCG’s plan to hold at least 30 percent of GLOBAL’s total voting shares by purchasing GLOBAL ordinary capital shares through a private placement.

In this regard, SCG would make a partial offer of GLOBAL shares, which was expected to increase business strength for GLOBAL.

Making the most of being close to the royal center.

As the report makes clear, most of those found guilty “are from the country’s richest families.” The Forbes’ 2015 list of Thailand’s 50 richest has this:

– Mr Chai’s half brother, Chatri Sophonpanich, was ranked 14th with estimated assets of US$1.5 billion (about 52 billion baht)

– Mr Somyos and his then-wife Ms Jareeporn together were ranked 32nd with estimated assets of $765 million

– Witoon Suriyawanakul was ranked 48th and worth $470 million

The Chearavanont family was worth ranked 1st, worth US$14.4 billion.

It seems that the rich never have enough.

By the way, for interest, insider trading in other places seems to sometimes draw bigger penalties: In the US, 11 years in prison and fined a criminal and civil penalty of over $150 million; in the US, $8.8 million fine; and in Australia, more than 8 years in jail.


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