Bangkok--Feb 22--SET
The Stock Exchange of Thailand (SET) revealed today that Mr. Prachai Leophairatana has been accused by the Securities and Exchange Commission (SEC) and thus he no longer appropriately qualifies to serve as a listed company’s executive. Therefore, Mr. Prachai is no longer entitled to serve as an executive of Bangkok Union Insurance Pcl. (BUI). In addition, BUI will no longer qualify as a SET-listed company and will be subject to delisting unless Mr. Prachai resigns from his post at the company.
“The SET would like to urge Mr. Prachai Leophairatana to show his spirit to the company by resigning from BUI. If he continues to stay on, BUI may face delisting, and this could severely affect a large number of shareholders of the company. To reduce the risk of possible damages that may negatively impact BUI, its shareholders and its employees, Mr. Prachai should seriously consider resigning,” SET EVP Mr. Suthichai Chitvanich said.
On August 5, 2004, the SEC filed an accusation against Mr. Prachai with the Department of Special Investigation (DSI). The charge was that Mr. Prachai had released information which could mislead other people about a possible rise in TPIPL’s (TPI Polene Pcl.) share price. Having been accused by the authorities has made Mr. Prachai ineligible to serve as a listed company’s executive, as stipulated by both the SET’s and SEC’s rules.
The SET sent a letter to the BUI board of directors on August 18, 2005, notifying them to adjust its qualifications for BUI executives within 60 days. BUI made an appeal to the SET’s Appeal Committee on September 1, 2005, stating that the SET’s rule on maintaining listed company status (which refers to the SEC announcement on qualifications of issuer’ executives) requiring BUI to reconsider Mr. Prachai’s qualifications was invalid, as the rule could not be implemented retroactively.
The SET’s Appeal Committee, which is comprised of external experts who are impartial and independent, considered BUI’s appeal unreasonable. The committee viewed both the old and current rules stipulated similar requirements on disqualifying a company’s executive when he/she has been accused.
Although the SET notified the BUI about its appeal resolution on November 23, 2005, and the 60-day period (excl. the appeal), which lasted until January 12, 2006 has expired; Mr. Prachai still has not yet resigned from BUI.
The SET viewed that the time being taken by BUI to adjust its qualifications was understandable but there’s still no action taken. However, if Mr. Prachai cooperated and complied with the SET and its rules by resigning from his post, BUI’s situation would be improved. In doing so, Mr. Prachai will still retain his full rights to prove his innocence within the justice system whilst protecting BUI, its shareholders and employees against any possible damages. Eventually, when the case is finalized and if Mr. Prachai is found to be not guilty, he can then resume his post in BUI as before.
The change in a listed company’s management is under the board of directors’ authority. The SET hopes that BUI’s board will do its fullest to maintain its independence as per good governance principles without harming any of its stakeholders.
Furthermore the SET encourages BUI’s shareholders to exercise their rights to protect the company’s benefits, e.g., they can raise this case in a shareholders’ meeting even though it isn’t included in the meeting’s agenda.
The SET sincerely hopes that the case will end with a positive outcome for all concerned, through full efforts of the directors and shareholders. Delisting BUI will be the last action the SET will resort to, used only if it sees no other way.
The history has shown that when other listed companies faced similar problems, such as when their executives have faced accusations, those executives resigned from their post to protect the company’s and its shareholders’ interests.
Attachment to SET News Release No. 27 /2006 dated February 21, 2006
Examples of past accusation cases:
Case 1
August 23, 2004 The SEC filed an accusation with the Department of Special
Investigations (DSI) against:
(1) Mr. Thosapong Jarutavee for the transfer of benefits in N-PARK to Ms. Sawang Mankongchroen, and
(2) Mr. Thosapong Jarutavee for assisting and being a beneficiary of Mr. Thosapong Jarutavee.
Mr. Thosapong Jarutavee resigned from his Director positions at N-PARK and PA, while Ms. Sawang Mankongchroen resigned from her Director position at SYNTEC effective August 23, 2004.
Case 2
December 1, 2004 The SEC filed an accusation with the DSI against:
(1) BSI’s executives Mr. Prasert Tangtrongsakdi, Mr. Kris Khemadham, and Ms. Sangchit Laohathai for causing three BSI subsidiaries to register capital increases without really injecting capital, and
(2) Mr. Kris Khemadham, Ms. Sangchit Laohathai, Mr. Suthep Kitsawat, and Mr. Pornchai Ua-arayaporn for not consolidating the company’s 2002 financial statements in line with the accounting standards concerning consolidated statements and investment in subsidiaries.
December 3, 2004 Mr. Prasert Tangtrongsakdi resigned from his
Director position at MSC.
December 14, 2004 Mr. Suthep Kitsawat resigned from MDX.
December 31, 2004 Mr. Pornchai Ua-arayaporn retired from BSI.
March 21, 2005 UFM notified that Mr. Kris Khemadham and
Ms. Sangchit Laohathai did not renew their terms as
directors.
April 5, 2005 Mr. Suthep Kitsawat and Ms. Sangchit Laohathai resigned
from BSI.
July 1, 2005 Mr. Prasert Tangtrongsakdi and Mr. Kris Khemadham
resigned from their Director positions at BSI.
July 8, 2005 Mr. Prasert Tangtrongsakdi resigned from his Director
position at TCCC.
July 11, 2005 Mr. Prasert Tangtrongsakdi resigned from his Director position at UFM.
Case 3
June 30, 2005 The SEC filed criminal complaints with DSI against two
directors of PICNI-- (1) Mr. Theeratchanon Lapvisuthsin,
and (2) Ms. Supaporn Lapvisuthsin for producing incorrect documents and accounts as well as other unlawful activities. Another 8 persons involved in assisting these 2 executives were also accused.
June 16, 2005 Mr. Theeratchanon Lapvisuthsin resigned from his
Director position at PICNI.
July 8, 2005 Ms. Supaporn Lapvisuthsin resigned from her Director
position at PICNI. End.