The Securities and Exchange Commission (SEC) has imposed a civil sanction on 11 individuals involved with insider trading of securities of SET-listed Energy Earth Plc (EARTH).
Upon receiving information from the Stock Exchange of Thailand, the SEC has examined further and found that Khajohnpong Khamdee, as chairman of the board and director of Energy Earth, met financial institution creditors on May 15, 2017 to request postponing debt repayment since the company was experiencing a liquidity crunch, but was denied.
Mr Khajohnpong later informed two then-directors of Energy Earth, Phisudhi Phihakendr and Phipat Phihakendr of the situation.
From May 16 to June 7, 2017, Mr Khajohnpong and Mr Phisudhi had used insider information to sell 33.34 million of Energy Earth shares and 72.12 million units of EARTH-W4 worth a combined 88.80 million baht, aiming to avoid losses incurred from a decline in share price as a result of the company's liquidity problem, according to the SEC.
The transactions were made through securities accounts of four individuals -- Jittkasaem Kunchayangkul, Kasemson Kunchayangkul, Luckana Jantem and Supaporn Saikham -- with Pachawat Kunchayangkul facilitating these transactions.
During those periods, Mr Phipat, Thanyakamol Tritrakarn, Thanaporn Pongthiti and Piriya Pihakane used insider information sell their holdings of Energy Earth shares, worth a combined 75.04 million baht.
The SEC imposed civil fines worth a combined 100.5 million baht on these 11 individuals for insider trading, and they are barred from becoming executives or directors of securities-issuing companies for 1-4 years.
They are also liable to pay the SEC a sum of 18,900.45 baht each for the cost of the investigation process.
Energy Earth entered financial straits after failing to redeem two lots of bills of exchange (B/Es) worth 90 million baht that were due in June 2017. At the time it said the firm's cash flow had been squeezed after its overdraft line of credit was halted.
The company's financial problems snowballed when a raft of its B/Es defaulted, triggering cross-default debentures worth 5.5 billion baht.