Anti-graft actions speak louder than words at SEC
published : 18 Mar 2016 at 04:35
newspaper section: News
Earlier this week, the Securities and Exchange Commission (SEC) again demonstrated to its state regulating peers that it is doing its job to enforce rules and regulation that ensure a level playing field in the financial markets, without empty promises and endless vows.
The capital market regulator announced on Wednesday it had fined top executives and shareholders of five companies listed on the Stock Exchange of Thailand for insider trading, its second crackdown in three months on top managers who have abused their power in publicly traded firms for their own benefit or for their cronies.
In December, the SEC moved to slap four top executives of CP All Plc, Thailand's biggest convenience store operator, with hefty financial penalties.
It fined Korsak Chairasmisak, chairman of the executive committee, Piyawat Titasattavorakul and Pittaya Jearavisitkul, two vice-chairmen of the executive committee, and Athueck Asvanund, the firm's chief legal officer, a total of 33.34 million baht for using inside information to buy shares in Siam Makro Plc.
On Wednesday, the regulator said it had banned Chai Sophonpanich, chairman of Bangkok Insurance Plc (BKI), from being a director at Bangkok Life Assurance (BLA) for three years for his involvement in insider trading. He has also been barred from working in capital markets for the same period. The ban took effect yesterday, but he is not prohibited from working at BKI.
The SEC said Mr Chai, as director and chief executive at the time, had revealed BKI would give two stock dividends for every five shares held by shareholders on top of cash dividend payments for the company's 2013 financial operations to those who bought BKI's shares from Feb 24 to 25, 2014 ahead of public disclosure on Feb 28 of the same year.
Such actions are deemed to have taken advantage of other investors and breached Securities and Exchange Act Section 241; therefore the SEC's Settlement Committee fined him 500,000 baht.
Other listed companies' executives found guilty of unfair trading practices by the securities watchdog in Wednesday's SEC announcements were:
- Somyos Anantaprayoon, current chairman of WHA Corporation Plc, who was fined 500,000 baht for telling two newspapers -- with the articles published on Oct 27, 2014 -- that the company was in talks to acquire a listed company worth 50 billion baht, though such information had not yet been made public.
- Witoon Suriyawanakul, chairman of the management committee and director of Siam Global House (Global), and three other shareholders, who were given a combined fine of 25.3 million baht for insider trading. The SEC found that Mr Witoon bought 8.02 million shares and 3.5 million units of warrants of Global from June 29 to Aug 23, 2012 using accounts of people who have a relationship with him in order to take advantage of inside information regarding SCG Distribution's planned acquisition of Global. The other three shareholders were viewed as accomplices. The acquisition was disclosed to the public on Aug 27, 2012.
Most of these guilty executives are from the country's richest families. According to Forbes' 2015 list of Thailand's 50 richest:
- Mr Chai's half brother, Chatri Sophonpanich, was ranked 14th with estimated assets of US$1.5 billion (about 52 billion baht)
- Mr Somyos and his then-wife Ms Jareeporn together were ranked 32nd with estimated assets of $765 million
- Witoon Suriyawanakul was ranked 48th and worth $470 million
Without fear of reprisals or of political ramifications from these powerful and super-rich figures, the SEC did its job honestly, even though the investigation process was tedious and time consuming -- a model other state regulators or law enforcers could have adopted in the war on corruption without wasting rhetoric.
Nearly two years after the National Council for Peace and Order (NCPO) ousted the elected civilian government in the May 2014 coup on the pretext of getting rid of rampant corruption committed by cronies of then prime minister Yingluck Shinawatra and her brother Thaksin and its pledge to address this malaise as its top priority, the situation does not seem to be improving, even in the eyes of the NCPO's greatest supporters.
Statesman and Privy Council president Prem Tinsulanonda said over the weekend that corruption in Thailand remains a critical problem as efforts to tackle it have made little headway.
"Our country has seen a fairly high rate of corruption and I think we really should feel ashamed of being branded a corrupt nation. And this is an important issue. We have to help wipe out the 'corrupt nation' reputation," the nonagenarian former prime minister told a seminar in parliament on the role of religion in fighting corruption organised by the National Legislative Assembly's committee on religious affairs.
"There have been statistics that show work to suppress corruption in our country has progressed very slowly and if it is left this way forever, the nation will fall."
The NCPO is aware that society has tremendously high expectations of it and the military in tackling corruption, though the public has always had suspicions over past military procurements.
At a seminar to launch a corruption-free and transparent Ministry of Defence on Wednesday, NCPO deputy chairman and Defence Minister Prawit Wongsuwon insisted the purchase of military hardware is free of kickbacks and that the steps involved are transparent.
"Some people say that buying weapons has to involve commission payments, but we have never done it," said Gen Prawit, adding the process of buying weapons is clearly defined, ranging from selecting models, issuing median prices for bidding to specifying the criteria for supplying the weapons.
Gen Prawit said the ministry plays an integral part in ensuring security and boosting confidence among members of the public that the country is safe.
"The Defence Ministry will be unable to create public confidence if it lacks transparency," Gen Prawit said.
But transparency comes with openness to disclose information involved in procurements, giving equal access to all bidders and being willing to punish wrongdoers.
The most immediate case for the ministry is perhaps whether those who have taken kickbacks in the construction of the controversial Rajabhakti Park will be named, shamed and punished.
Nopporn Wong-Anan is deputy editor, Bangkok Post.
Nopporn Wong-Anan is deputy editor, Bangkok Post.