More support vowed for retail investors
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More support vowed for retail investors

TIA secretary-general Siriporn Jungtrakul
TIA secretary-general Siriporn Jungtrakul

The Thai Investors Association (TIA) is promising to be more active in assisting class action lawsuits by establishing a centre to help retail investors who claim damages from stock investments.

Founded in 1989, TIA is meant to protect the interests of retail investors in the Thai stock market.

From 2006, the association widened its role by participating in quality assessments of listed companies' shareholder meetings.

Secretary-general Siriporn Jungtrakul said the Thai Investor Assistance Center is expected to be opened later this year to help investors with class action lawsuits when they suffer damages from investing in the stock market.

According to a definition by the Thai Securities and Exchange Commission (SEC), a class action or class suit is a type of civil proceeding involving several injured people who are affected by the same facts and legal principle, or the same grounds of damage.

"Assistance can be provided in class action cases in which the SEC has filed a complaint because it means there is a clear mistake, fraud or corruption by executives of listed companies, causing damage and affecting stock prices," said Ms Siriporn.

According to Thai law, investors must file a lawsuit within one year from the date they learned of the damage.

The new centre aims to provide assistance until the court approves the class action.

Cases proceed through two courts, starting with the Civil Court, with possible consideration by the Court of Appeals.

The Class Action Law has been in effect for nearly 10 years, but has never been used in relation to the Thai stock market.

Research by Chulalongkorn University's Faculty of Law found there were two major obstacles. First, there are few lawyers with knowledge of capital markets and they lack the expertise to probe complicated fraud in the stock market.

Second, retail investors have been unable to gather together, so the investors remain anonymous and are less likely to stand up to protect their rights, according to the research.

"These obstacles blocked any cases from proceeding," said Ms Siriporn.

The TIA signed a memorandum of understanding with the Lawyers Council to provide a training course to inform lawyers about investing in the Thai stock market, with 81 people taking part, she said.

"The Stark Corporation case last year had executives, directors and auditors work together to fraudulently manipulate accounts. This provided a wake-up call to investors to learn their rights when such abuse happens," said Ms Siriporn.

"TIA recommends investors preserve their rights. The SEC has a call centre for complaints and a hotline number [1207], while other agencies related to the capital market, such as the Stock Exchange of Thailand [SET], are taking steps rebuild confidence."

The association's mission is to act like a watchdog, attending shareholders' meetings of listed companies and making assessments in three parts, she said.

Before the meeting, TIA will check the meeting's invitation letter to see whether complete information is provided, according to the Public Companies and Securities and Exchange acts.

On the day of the meeting, volunteers from the association will attend to protect shareholders' rights and verify the accuracy of the shareholders.

There are about 600 volunteer investors who have been trained and registered with the association, said Ms Siriporn.

These volunteers do not have to be shareholders of the company to attend a meeting, as TIA has a proxy and will vote "no" if there is a point of disagreement, she said.

After the meeting, follow-ups are scheduled to ensure the listed company sends the minutes of the meeting to the SET within 14 days. If not, the TIA will report the matter to the SEC.

"I believe investors' concerns have been eased somewhat after the SEC announced policies to regain confidence and restore the faith of investors. But in addition to actions by relevant agencies, investors must do their best to protect their own rights," Ms Siriporn said.

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