Stock Exchange of Thailand (SET) president Kesara Manchusree says Polaris Capital Plc (POLAR) is facing a probe into a possible case of irregular management after the company failed to inform the public that it is under receivership by a court order.
"POLAR didn't disclose that the company is facing bankruptcy proceedings, and the SET received the information from other sources. The company only informed us that it had filed for business rehabilitation and later withdrew the petition," she said.
The SET will cooperate with the Securities and Exchange Commission (SEC) in the investigation, Mrs Kesara said.
The SET yesterday gave Polaris until tomorrow to clarify why the company had failed to inform the public that it is under receivership by a court order.
Polaris had informed the bourse that in May it filed a business rehabilitation petition but had withdrawn it later. However, it has been found that the company is under receivership by the order of the court, which significantly affects its shareholders' rights, the SET said in a statement.
The SET requires Polaris to explain a number of issues concerning the receivership status.
"Why did the board of directors fail to disclose that it had filed for bankruptcy as the company has a duty to immediately convey such information to the SET? This is the issue putting POLAR in a breach of SET regulations," the SET said.
The SET has asked Polaris to confirm whether the company is under receivership, and explain its board of directors' actions now that the court has ordered the company to be under receivership along with its plans to protect the interests of the company and its shareholders.
The SET has directed Polaris to submit details and causes of its debt and inform the stock exchange if the creditor is the same person who sued the company for the repayment of debt, forcing the company to file the rehabilitation petition.
The stock exchange has also directed Polaris to reveal the entire sequence of events and facts leading up to and after the filing for business rehabilitation through the court, including the withdrawal of the petition and the subsequent filing for bankruptcy, which caused it to be under receivership by the court order.
The SET has also required Polaris to urgently answer its recent queries pertaining to the withdrawal of its business rehabilitation petition while elaborating the reasons, the causes of debt which contain some inconsistent facts and contradict information previously submitted to the SET.
The SET has further requested the board of directors to clarify the nature of the damages incurred and other factors causing Polaris to go insolvent.
According to Polaris' 2016 financial statements, its shareholders' equity stands at 4.58 billion baht which exceeds its total liabilities of 465 million by a wide margin.
"Furthermore, the board of directors and management of a listed company have the duty and responsibility to disclose significant information which could affect the shareholders' benefits and investment decisions, completely, correctly, and on a timely basis. Non-disclosure of significant information may suggest that the board of directors and management had the intention of violating the SET regulations," the SET said.
Polaris' shares have been suspended from trading since March 1 for its failure to submit financial statements and providing explanations concerning the company' investments, including purchase of land on Pahonyothin road and cancellation of an investment in Day Poet Co Ltd -- the publisher of A Day and Hamburger magazines.