The Stock Exchange of Thailand (SET) on Monday indefinitely suspended More Return Plc (MORE) after noticing irregular trading practices, asking the company for an explanation and requesting brokers take additional measures to monitor trade of the company's shares.
The SET put an SP (suspension) symbol on the MORE stock and suspended trading until investors are provided with comprehensive and accurate information from all sides concerned.
According to the SET statement, the bourse said it noticed irregularities on Nov 10 when trading in MORE stock rose to more than 7.14 billion baht, the highest on both the main exchange and the Market for Alternative Investment.
MORE shares opened at 2.90 baht last Thursday, up 4.3% from prior trade, then declined to a floor of 1.95 baht.
The price continued to decline the next day to 1.34 baht, at which point the SET notified investors to trade with caution and required brokers to increase measures to supervise trading of such securities.
Most of the purchase orders reportedly came from a major shareholder of the company, with the sales also coming from the same person.
More Return president and chief executive Ummarit Klomchitcharoen has denied any involvement in these transactions.
"There was a lot of news and inaccurate information about MORE securities over the weekend, which may lead to confusion and affect the decisions to trade MORE securities. In order to give investors the opportunity to receive correct and complete details from all concerned parties, the SET agreed to suspend trading of MORE securities on Nov 14," the SET statement said.
The SET consulted with brokers, the Anti-Money Laundering Office and the Securities and Exchange Commission in order to investigate such abnormal trading of MORE stocks, which might affect certain brokers.
The potential impact depends on the size and volume transacted through a broker.
Currently all brokers continue to provide their services to investors as usual.
In addition, the SET confirmed that clearing and settlement of trading transactions among all brokers and Thailand Clearing House (TCH), the central counterparty, will continue to operate normally, according to the statement.
SET president Pakorn Peetathawatchai said the bourse has enough clearing and settlement funds for the irregular trading transactions in case the involved brokers and the company run out of cash to service the transactions.
The SET has a total market capitalisation of about 20 trillion baht, while MORE has a total market capitalisation of around 10 billion baht.
"Both domestic and foreign investors can be confident that the Thai stock market remains stable, and we can deal with this issue without any impact on the overall market," said Mr Pakorn.
Pichet Sithi-Amnuai, president of the Association of Securities Companies, said all brokers involved were ready to handle MORE stock transactions, without disclosing the number of brokers involved nor the damage that may occur from investors' failure to pay for share purchases.
Krungsri Securities, which was reportedly involved in the transaction, said the company has a strong financial position with a much higher net capital rule (NCR) for settlements, with other transactions still operating normally.
Innovest X Securities stated the transaction is not significant compared with its normal operations. However, the guidelines for trading such shares are under the supervision of relevant organisations and they will be notified later, said the brokerage.
Daol Securities confirmed the company has a strong capital base and a sufficient NCR or net liquid capital ratio to operate the business.
The company completed share payments with the TCH yesterday according to the normal procedures.
"Putting a single stock order from multiple brokers at such a high value is unusual behaviour and has never occurred in securities trading in Thailand before," said Daol Securities.
"This makes it a suspect transaction and the company has investigated and discussed the matter with the relevant authorities."