A man has been arrested on a charge of public fraud for selling initial public offering shares he did not have.
Mr Panasarn is taken to the Crime Suppression Department on Dec 6, 2014 after being arrested in Phetchaburi province. (Photo by Apichit Jinakul)
Panasarn Somchiwita, 33, claimed he had been allocated almost a million shares each of three newly listed companies - Carabao Group Plc (CBG), Vichitbhan Palmoil Plc (VPO) and Muangthai Leasing Plc (MTLS) - through the "patron quotas" ahead of their first trading dates, according to police.
He then sold them to a number of people who in turn transferred money to his bank accounts.
When the shares began trade on the Stock Exchange of Thailand (SET), Mr Panasarn could not transfer the shares to the stock-trading accounts of the damaged parties. When asked, he blamed it on the SET's red tape. Later, he claimed his money was frozen by the Anti-Money Laundering Office.
The victims eventually reported to the police who gathered evidence and sought his arrest warrant.
Pol Maj Gen Prawit Tavornsiri, acting chief of the Central Investigation Bureau, said preliminary investigation had shown the man owned only a handful of these shares.
"Whether brokers played a part in this scam remains to be seen. The suspect confessed he had done this 2-3 times and then ploughed the profit in a new round," he said.
Police are following the money trail to confiscate all the money.
Although Mr Panasarn confessed and said he intended to return the money to all of the victims, the case cannot be settled because it is a criminal offence, the general said.
Songkran Atchariyasap, a lawyer volunteering to help the victims, said his clients had traded successfully with the suspect 3-4 times and began to trust him.
"He sold high-profile IPO shares and the fact that he's a son of a public figure helps. Today, five more people sought help from me and the damage could total 600 million baht," Mr Songkran said.
Mr Panasarn is a son of Santhat Somchiwita, an expert on the Department of Special Investigation Board and former permanent secretary of the Science, Technology and Environment Ministry.
Thai stock exchanges in 2014 had the highest number of new IPO share listings that more than doubled shareholders' initial investment on their opening days in history, reinforcing the expectation that investors' thirst for IPOs could continue in 2015.
Twelve IPOs more than doubled their opening price at the close of their opening days as of November, outpacing the eight IPOs in 2013 and seven the previous year.
Four of the 12 stocks hit the ceiling 200% gain on the first day, all small to mid-cap stocks listed on the Market for Alternative Investment.