The Securities and Exchange Commission (SEC) has accused Polaris Capital Plc (POLAR) executives of creating an artificial debt of 3.6 billion baht with the intention of entering the company into a business rehabilitation plan, along with falsifying documents and accounting statements.
The accused include five Polaris executives, four other individuals and two companies: Simba Inter Co Ltd and United Trading Group Co Ltd.
The market regulator has filed a case with the Department of Special Investigation (DSI).
"The SEC's accusation is the beginning of criminal procedures," the SEC said in a release. "Under this process, determining whether a person is an offender depends upon the DSI, the public prosecutors' orders and the Court of Justice's discretion, respectively."
Apart from the complaints made about Polaris's business practices, the SEC said it spotted Polaris executives behaving questionably in last year's second quarter.
After investigating the relevant information, the SEC found that the nine individuals and two companies had jointly collaborated in wrongdoing in 2017.
Polaris executives forged a debt of 3.6 billion baht by using an unnamed third party, which had a falsified debt amount, in a bid to sue for high-value damages, according to the SEC.
The move was an attempt to deceive the general public into believing that Polaris had shouldered substantial liabilities in a short period, subsequently resulting in assumptions that the company was on the verge of insolvency and needed to enter a business rehabilitation plan, the SEC said.
Ultimately, Polaris's true creditors were not paid and Polaris's action was deemed an offence for impeding debt repayment.
The third party could also file a claim for bankruptcy proceedings, whereby Polaris's assets were ordered by the Central Bankruptcy Court into a receivership.
The manoeuvre is regarded as an attempt to embezzle Polaris's assets, according to the SEC.
The board of directors meeting held by Polaris executives to decide upon the company's business rehabilitation petition and the manner in which Polaris informed the Stock Exchange of Thailand about the petition were deemed as ploys to deceive investors and shareholders about the company's financial condition and business performance, the SEC said.
The SEC in February requested that the Civil Court impose a 2-million-baht fine on Yannakorn Warakunrak and Poonsak Chumchuay, two executives at Polaris, and bar them from becoming directors at listed companies for 10 years on the grounds of information concealment and halting business operations.
Polaris was already subject to de-listing on Nov 14, 2017 because it failed to submit financial statements for the first quarter of 2017 within 180 days.
The company stated earlier that it could not prepare or submit financial statements for last year's first quarter because of its receivership status. As a result, a shareholders' meeting could not be held to appoint auditors and establish the audit fee.
In May 2017, Polaris informed the SET that it had filed a business rehabilitation petition, which was later withdrawn.
The firm was later discovered to be under a court-ordered receivership, which significantly affects shareholders' rights.
POLAR shares have been suspended from trading since March 1, 2017 due to Polaris's failure to submit financial statements and provide explanations for investments, including the purchase of land on Phahon Yothin Road, and the cancellation of an investment in Day Poet Co Ltd, the publisher of A Day and Hamburger magazines.