Thai regulators intensify fight against illegal securities trading

Stock market regulators intensified their collaboration with the Anti-Money Laundering Office (AMLO) to combat illegal securities trading, aiming to dismantle criminal economic activities and boost investor confidence in the Thai capital market.

A memorandum of understanding (MoU) signed yesterday, August 26, between the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) marks a significant step towards this goal. The agreement intends to enhance their joint efforts under the Securities and Exchange Act and the Anti-Money Laundering Act.

The MoU targets dismantling criminal economic activities, especially those related to securities trading, and bolstering the law enforcement capabilities of both agencies, said SEC chairman Wisit Wisitsora-at.

“Economic crimes in the capital market not only cause direct harm to investors but also have broader implications for the country’s overall economy.”

He noted that several major cases in the capital market have surfaced over recent years, causing significant financial damage and widespread repercussions.

SET chairman Kitipong Urapeepatanapong assured the public that the MoU ensures future securities violations will face swift, coordinated responses from local government officials.

Financial misconduct

The agreement aims to streamline work processes and improve the handover procedures between regulators and law enforcement agencies, ensuring quicker, more efficient action within their legal boundaries.

SEC Secretary-General Pornanong Budsaratragoon stated that the trilateral agreement is expected to enhance cooperation in information exchange and coordination, and possibly form joint task forces when necessary.

The primary objective is to strengthen prevention and enforcement efforts against unfair securities trading practices, embezzlement, fraud, and financial misconduct under the Securities and Exchange Act B E 2535 (1992), which are considered predicating offences under the Anti-Money Laundering Act, impacting investor confidence and economic growth.

SET president Pakorn Peetathawatchai highlighted that collaboration among justice system agencies is crucial for deterring and swiftly enforcing legal actions against offenders.

Such efforts are crucial in restoring and strengthening investor confidence in the Thai capital market as Peetathawatchai noted.

This agreement coincides with the SEC and SET’s coordinated efforts in the case of Warrix Sport. The listed apparel company discovered that 15 million shares, deposited as collateral with the custodian, are missing despite no default in loan repayment.

Corruption process

Pornanong mentioned that regulators have been in discussions with Warrix executives since last week. However, the custodian, Wisan Wanasuksrisakul, Warrix’s chief executive and largest shareholder, deposited the shares with a company outside the SEC’s supervision.

Thus we have no authority to take action, but if we find any real wrongdoing, it will enter into the corruption process according to general law as Pornanong stated.

Wisan informed the SET last week that Warrix sold 14,942,530 shares, or 2.49%, to Hi-Tech Apparel, a sportswear original equipment manufacturer and exporter for many global brands, through the Thailand Securities Depository Co.

He proceeded to terminate the loan agreement and filed a legal lawsuit to track down the missing shares and compel the custodian to return all shares deposited as collateral.

Additionally, he has requested a court order to seize the 105,211,000 shares remaining in the custodian’s possession, prohibiting the custodian and its representative from selling or transferring these shares, reported Bangkok Post.