SEC and SET urged to investigate Raimon Land

The Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) have been asked to investigate irregularities at property developer Raimon Land (RML). Shareholder Arthit Narula, who owns around 21 million shares or 0.5% of RML, claims the situation could be as significant as the corporate scandals involving Stark Corporation and Energy Absolute (EA).

Arthit Narula sent an email to both the SEC and the SET highlighting ongoing irregularities, particularly RML’s failure to raise its registered capital to 7.76 billion baht. Narula pointed out that the company has not informed shareholders or market regulators about this failure.

KPN Land Ltd, controlled by the Narongdej family, holds 23.97% of RML. In mid-March, RML’s board of directors approved a plan to increase its registered capital from 3.58 billion baht to 7.76 billion baht to support growth and enhance profit generation, said Narula.

“The company has managed to mobilise slightly more than 1 billion baht in fresh capital but hasn’t informed shareholders or regulatory agencies that it cannot complete the capital increase as announced. The information hidden by the Narongdej family could cause substantial damage to minority shareholders, similar to the cases of Stark and EA.”

An SEC official has acknowledged receiving Narula’s inquiry, and it is currently being processed. However, Anek Yooyuen, deputy secretary-general of the SEC, declined to comment on the RML case, stating that any inquiries would be investigated according to standard procedures.

No matter the case, there must be evidence of wrongdoing. The SEC will thoroughly investigate all parties involved to see if the informant has any hidden agenda as said Anek. We take the same steps in every case. Once we find a substantial violation, the SEC will collect evidence, investigate, and forward the case to the police.

Necessary evidence

The police will then gather all necessary evidence and prepare the case for submission to the prosecutor for court consideration. Anek noted that if a violation is found and credible evidence is obtained, those involved will be charged according to the SEC Act, and the media will be notified.

Arthit Narula also mentioned that Raimon Land’s failure to raise the capital stemmed from a promise by Somphote Ahunai, a founder and former chief executive of EA, to inject the needed funds into RML. However, Somphote later reneged on the deal.

Somphote, who faced fraud accusations by the SEC while at EA, reportedly told John Tay, the Singapore-based representative of RML’s second-largest shareholder Mesa Thai Pte, that he intended to buy around 20% of RML from the Singaporean shareholder.

But eventually, Mr Somphote didn’t pay Mr Tay for the proposed transaction, possibly due to his personal troubles at EA as Narula said.

He also informed Patee Sarasin, an RML board member and shareholder, about the issue, but it appears that the management has not addressed it.

Since the Narongdej family took control of RML five years ago, the company has experienced continuous losses without launching new projects, Narula stated. The share price dropped from 0.42 baht to 0.26 baht during this period. Based on SET filings, Raimon Land recorded losses of 718, 453, 315, and 812 million baht from 2020 to 2023, respectively. In the first half of this year, it posted a loss of 582 million baht.

Market conditions

Raimon Land’s Chief Financial Officer, Sorrapong Mamuang, stated that the company completed the first phase of its capital increase, achieving 65% or more than 681 million baht. However, the company decided to extend the timeline for the second phase, considering market conditions and focusing on maximising shareholder value.

Sorrapong emphasised Raimon Land’s commitment to launching new projects that meet market demand and add value to the company. The firm plans to launch a luxury low-rise housing project called The 528 Estate, valued at 4 billion baht, through private sales on an invitation-only basis.

To return to profitability, Sorrapong outlined short-term goals, including reducing unnecessary expenses, increasing sales and ownership transfers, and boosting the occupancy rate at the OCC office tower to 90% this year. The sales effort includes offering units in its luxury resort condo, The River, at special prices.

The medium-term plan involves strategic investments that align with the company’s long-term goals, ensuring sustainable growth. Raimon Land aims to convert the OCC project into a trust fund, proposing investment to large domestic and global players, with completion expected by 2025.

For the long term, Raimon Land seeks to build confidence through the OCC office tower, which should generate recurring income. We have land in prime areas such as Sukhumvit and Kamala in Phuket for future project development. We believe these factors will help ensure long-term stability and growth, reinforcing shareholder confidence as Sorrapong said, reported Bangkok Post.