Asia Wealth Securities ordered to cease operations

Asia Wealth Securities ordered to cease operations

The Securities and Exchange Commission (SEC) on Tuesday ordered Asia Wealth Securities (AWS) to cease all operations and transfer its assets to other securities companies, citing its ailing financial status.

In a statement issued yesterday, the SEC said AWS's net capital was negative for more than five business days from Nov 14 and all of its business activities would be suspended until it could maintain its net capital (NC) ratio and it receives permission from the SEC to resume operations.

The regulator also ordered AWS to transfer the assets of its clients to peer brokerages within 10 business days from Monday.

On Nov 17, the SEC suspended AWS for alleged use of clients' money without their consent to buy shares, which was reportedly shares of More Return Plc (MORE). According to the regulator, AWS spent 157.99 million baht from clients' accounts on unauthorised share purchases.

Previously the SEC demanded AWS return all the money to clients by Nov 20, but the regulator said yesterday the company did not meet the deadline and the SEC decided not to extend it.

SEC assistant secretary-general Anek Yooyuen told a press briefing AWS was given 30 days to increase its NC ratio to meet the regulator's requirement.

The company has 5,300 customers with 300 million baht worth of customer assets.

"Though its NC is negative, the company's debt is not high. The SEC ordered the company to transfer customers' accounts to other securities firms and when its financial position improves, AWS can reopen for business," said Mr Anek.

The regulator is conducting an investigation and a decision will be made later on whether current AWS executives are still qualified for their jobs, he said.

AWS chief executive Chanachai Joonjiraporn reportedly resigned from his position on Nov 18.

The SEC is working with the Stock Exchange of Thailand and the Anti-Money Laundering Office (Amlo) to investigate suspicious share trading of MORE, which is listed on the Market for Alternative Investment and operates in the energy, water and property sectors.

The irregular MORE trades caused damage estimated at more than 4.3 billion baht to several brokers.

Amlo notified brokers to freeze 34 items related to MORE and MORE-R stocks worth 5.37 billion baht, in the form of cash and other assets bought from the sales of the two stocks.

The freeze lasts for 90 days.

The SEC said yesterday AWS must inform clients via written documents about the actions it is required to perform, as ordered by the regulator.

The company is also responsible for any expense occurring from the asset transfers.

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