The Securities and Exchange Commission (SEC) has filed a civil sanction against former directors and executives of SET-listed Inter Far East Energy Corporation Plc (IFEC) for fraud and unlawful exploitation from its purchase of CR Solar Co Ltd (CRS) between 2014 and 2015.
The case has been filed with the Economic Crime Suppression Division as the purchase has caused damages to IFEC, according to the SEC.
The name of the alleged offenders are Wichai Thavornwattanayong, Sitthichai Pornsupanan, Pannawit Jaturapornsawat, Thanawat Ganthong and T&S Inter Product Life Co Ltd (T&S).
The four individuals jointly proceed with the purchase of CRS shares from T&S, where the latter claimed to be a trading intermediary in 2014 and 2015.
From the examination of evidence, it was found that both Mr Wichai and Mr Sitthichai, then-IFEC directors, agreed to purchase CRS shares directly from previous CRS shareholders at 142 million baht with assistance from Mr Thanawat. They also paid 20 million as a deposit for the share purchase.
However, on the date of the sales and purchase of CRS shares on Feb 12, 2015, T&S instead entered into the share-selling agreement at the amount of 155 million baht, resulting in an additional sum of 13 million to be paid by IFEC to T&S, while previous CRS shareholders received an amount of 142 million for selling their stakes.
“Such act is a dishonest, unlawful exploitation for oneself or others, including false statements in the IFEC’s documents disclosed to the Stock Exchange of Thailand, claiming that IFEC entered into a CRS share purchase at a price of 155 million baht to deceive [related parties] which caused damages to IFEC,” said the SEC.
The action of former IFEC directors and executives and the above 5 persons are considered to be an offense under Section 311, 312, 313, 313 and 315 of the Securities and Exchange Act 1992 as well as Section 83 and 86 of the Criminal Code.
The market regulator has also proceeded to file the case to the Anti-Money Laundering Office.
The SEC's civil sanction is only the beginning of the criminal law enforcement process.
Disputes between IFEC shareholders became public in late 2014. IFEC’s stock has been flagged with a suspension symbol (SP) since December 2016.
Internal disputes and financial scandals have turned into a crisis for retail shareholders, as some members of IFEC’s board have continued to block scheduling of a shareholders’ meeting, leading investors to take matters into their own hands despite having market regulators in place.