The top executive of SET-listed CP All Plc who was fined more than 30 million baht for insider trading has denied he had any knowledge the company was interested in acquiring Siam Makro Plc when he bought its shares.
Chairman Korsak Chairasmisak called a press conference Thursday after the Securities and Exchange Commission (SEC) publicised his fine of 30.2 million baht.
In addition, CP All vice-chairman Piyawat Titasattavorakul was fined 725,000 baht, vice-chairman Pittaya Jearavisitkul 979,500 baht and Athueck Asvanund, a vice-chairman and group counsel of True Corporation, 1.4 million baht.
According to the SEC investigation, the four executives purchased Makro shares from April 10-22, 2013, when CP All was in negotiations with SHV Netherlands BV to buy 154.43 million shares or 64.35% of Makro at 787 baht apiece.
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"I had no idea at all that Charoen Pokphand or CP All would be interested in Makro at the time I bought the shares," Mr Korsak insisted Thursday.
"I really had no clue that my investment had violated the SEC code. Once I realised that, I stopped buying shares immediately. It was an accident. I didn't mean it. It will be my lesson.
"The SEC's announcement was … a bit burning and itching."
However, newspapers on April 23, 2013, reported Mr Korsak had told the press that CP All had an aggressive plan to spend more than 180 billion baht to acquire cash-and-carry giant Makro in a bid to use it as a spearhead to penetrate the Asean market.
The reports named Siam Commercial Bank as CP All's sole financial adviser, while underwriters were HSBC, Standard Chartered Bank, UBS AG and Sumitomo Mitsui Banking Corporation.
In the same reports, Mr Korsak said the tender offer price had been set at the same price of 787 baht that SHV had sold the shares.
Makro's share price surged dramatically from early 2013 on takeover rumours, with CP All being seen as a likely buyer.
Mr Korsak said the executives had all agreed to pay fines instead of objecting through the legal process.
Parent firm CP Group had decided not to impose any penalty against the executives, saying it understood they genuinely did not intend to commit insider trading, he said.
"But CP Group does understand us. No one needs to resign," Mr Korsak said,
"I did not do anything against corporate governance practice. CP All has continued to show prominent growth. Could all those excellent corporate governance listed firms make such high returns to investors as I do?"
True Corp's Mr Athueck said he was not aware of the transactions, and blamed his daughter for executing them.
"It was during an overseas trip and I was not informed about the transactions by my daughter," he told Reuters news agency.
In the case of Mr Athueck, 6,000 Makro shares were purchased via his daughter Areeya's account, the SEC said in its statement. She was one of those fined for aiding and abetting.
CPALL shares lost 5.35% on the SET Thursday to close at 44.25 baht in heavy trade worth 7.06 billion baht.
Capital Nomura Securities analysts warned CP All's image could be tarnished among foreign investors, who own 31.7% of the 7-Eleven convenience store operator. Moreover, the four executives could unload part of their holding in CP All to pay the fines, and this could pressure the company's share price.
SET president Kesara Manchusree said the case proved the SET and the SEC were working in a fair manner.
"No matter how big you are, if the regulator finds something wrong, all the rules and punishments are imposed without exception," she said, adding that the case found obvious and solid evidence, so enforcement proceeded without complications.
Mrs Kesara said the stock market was sensitive to rumours, so when there was a major effect caused by a rumour, the SET must find out the source of the speculation.
"Sometimes the rumour comes from outside the market, so the SET cannot control and approach the source," she said.
"But in the case of the rumour that the EU would boycott Thailand until an election was held, the deputy prime minister had already confirmed that it was totally untrue."
The bourse is in a negative mood clouded by external pressure such as the expected interest rate increase by the US Federal Reserve and China's weak economic growth, Mrs Kesara added.
Bandid Nijathaworn, president and chief executive of the Thai Institute of Directors, said company boards should lay out clear policies to prevent insider trading and ensure strict compliance by everyone in the organisation.
"This incident is an example that boards should implement policies," he said.
Mr Bandid said the evaluation of annual corporate governance reports for listed firms by his institute relied on information released to the public by the company and media reports prior to result announcements.
"This incident will affect the evaluation next year," he said.