The Securities and Exchange Commission (SEC) is drafting regulations to control the behaviour of major shareholders in the market, aiming to prevent incidents similar to the one involving Dr Boon Vanasin, founder and former chairman of SET-listed Thonburi Healthcare Group (THG), who used his own shares as collateral for debt repayment.
According to finance permanent secretary Lavaron Sangsnit, who is also a board member of the SEC, Dr Boon engaged in off-market fundraising by inviting lenders to invest, offering attractive interest rates and claiming the borrowed funds would be invested in various projects.
To secure these loans, Dr Boon used shares of Thonburi Hospital, where he was a major shareholder, as collateral. For example, for a loan of 100 baht, he pledged 4 shares of Thonburi Hospital, which were valued at 25 baht per share at the time. As the hospital's share price increased, the number of shares required as collateral decreased proportionally.
Mr Lavaron said such practices by major shareholders in the stock market pose risks that could negatively impact minor shareholders. For example, changes in shareholder structure or the appointment of inefficient management could lead to significant harm, particularly to small shareholders.
"To protect minor shareholders in the market, the SEC is preparing a draft regulation to control the actions of major shareholders if they intend to use their shares as collateral for loans, as in the case of Dr Boon," he said.
"They will be required to notify the Stock Exchange of Thailand [SET], which will allow authorities to monitor whether such actions might affect other shareholders. The measure aims to enhance transparency for investors."
On Nov 22, investigators from the Metropolitan Police Division 1 of the Metropolitan Police Bureau sought and obtained an arrest warrant from the Criminal Court for Dr Boon, 86.
The warrant included his wife, daughter and seven others, for jointly defrauding the public by inviting investments in medical-related businesses. The total damages are estimated at more than 8 billion baht.
Victims reported that Dr Boon and his family offered high-return investments with advance interest payments.
However, when the principal and interest came due in 2023, there were payment problems, and many checks issued to investors could not be cashed, leading to widespread complaints to the authorities.
Dr Boon has not yet been apprehended, with reports suggesting he has already left the country.
According to the SET, Dr Boon is the 11th-largest shareholder in THG, holding 5.8 million shares, equivalent to 0.68% of the company, valued at 90 million baht.