Bangkok--21 Jun--SEC
The SEC Capital Market Supervisory Board resolved to amend regulations on the public offering of newly issued shares by public limited company that its major business is holding other company’s stocks (“holding company”). The amended regulations specify that holding company must hold shares in its subsidiaries that are categorized as its core business (either established in Thailand or in foreign countries) at the proportion not less than 50% of the total number of voting rights of such subsidiaries, reducing from the minimum of 75% of the total number of voting rights. The regulations may be relaxed in case holding company is deemed to have control over the businesses according to accounting standards or is restricted by law or public joint venture. The amendment aims to facilitate business operations and joint venture of holding company, while holding company's control over subsidiaries will be maintained, said SEC Secretary-General Vorapol Socatiyanurak.
Moreover, to prevent holding company from having characteristics similar to investment company, the SEC specifies that the size of core business and other businesses that holding company holds shares, when compared with its total asset, must be as follows: 1) asset size of core business (subsidiaries and affiliate companies) must account for not less than 75% of holding company’s total asset and the core business’ s asset size must share significant proportion to holding company and 2) holding company’s investment capital in other businesses (non-core business) must be less than 25% of holding company’s total asset.
“Previously, the regulations required holding company to hold shares in core business in high proportion to allow absolute control over business. Practically, many of holding companies are unable to hold shares in such high proportion, especially when it is a joint venture with foreign partner. The SEC, therefore, relaxed the regulations to attract Thai and foreign investors to invest through Thai holding company where it will be more convenient for investors as investing in Thailand allows them to own several businesses in the region. The Thai capital market, thus, is able to offer myriad and diversifying financial products, increase its market size and become a regional investment center in the future,” said Mr. Vorapol.