The SEC’s investigation revealed evidence that during 2016-2017, two SLM directors and executives at the time—Mr. Katsuyuki Mizumachi, Chief Executive Officer, and Mr. Kiichi Okuyama, Chief Financial Officer—together with seven associates who jointly committed and/or assisted and facilitated the transactions of the said two directors as the case may be, namely Mr. Liam Dwyer Orton, Mr. John Worrall D'Arcy Grove, Mr. Mohammed Salamat Ali, Mr. Haruhiko Shin, Mr. Somboon Pobunsong, Mr. Jesada Daokaew, and Chuo Senko Advertising (Thailand) Co., Ltd. (CSA) (a former subsidiary of SLM), acted fraudulently through five suspicious transactions, as follows:   
          (1) An investment in shares of JRA (Fiji) Consultants, purportedly registered in the Republic of Fiji, which was found to be a non-existent company, causing damage of approximately 21 million baht;
          (2) An investment in registered shares and future capital shares of Sams Sport Retail Co., Ltd. (SAMS), and a purchase of shoes from SAMS, which were found to lack reasonable business grounds and legitimate purpose to perform the transactions, resulting in total damage of approximately 42 million baht;
          (3) Embezzlement of funds through capital increase transactions, a license agreement, and a subcontract agreement involving a subsidiary, Digital Dream Co., Ltd., which were found to lack a legitimate business purpose, and were intended to transfer benefits to Mr. John Worrall D'Arcy Grove and other persons, resulting in damage of approximately 33.4 million baht;
          (4) The transfer of office leasehold rights to CSA, which was found to be a transaction intended to transfer benefits to CSA, which was no longer an SLM subsidiary at the time, causing damage of approximately 11.9 million baht;
          (5) The execution of a network service agreement with CSA, which was subsequently ruled by a final court judgment to be void due to a deceptive declaration of intent by former director Mr. Katsuyuki Mizumachi. The transaction therefore constituted a fraudulent transfer of benefits to CSA, which was no longer an SLM subsidiary at the time, causing damage of approximately 2 million baht.

The five transactions above resulted in total damage of approximately 110 million baht to SLM.

The actions of the eight SLM directors, executives, and persons, together with one juristic person, as mentioned above, constitute violations of Section 307, Section 311, Section 313, and 281/2, Paragraph 2, in conjunction with Section 89/7, Section 89/24 in conjunction with Section 89/7 and Section 315 of the Securities and Exchange Act B.E. 2535 (1992) (SEA), as well as Section 83 or Section 86 of the Criminal Code, as the case may be.

Furthermore, the individuals imposed with the criminal complaint above are deemed to have untrustworthy characteristics of directors and executives of securities issuing companies and listed companies, and are thus barred from serving in such positions throughout the ongoing legal proceedings, effective upon SEC’s filing of the criminal complaint with the DSI.**

Following the criminal complaints filed by the SEC, the criminal enforcement process will proceed with an investigation by the inquiry official, a prosecution of the public prosecutor, and an adjudication of the court of justice, respectively. In this regard, the SEC will monitor the progress in the legal proceedings and will cooperate fully with relevant agencies to support legal enforcement under the SEA after the criminal complaint has been filed. 

Note:
* Notification of the Securities and Exchange Commission No. Kor Jor. 3/2560 Re: Determination of Untrustworthy Characteristics of Company Directors and Executives, dated 23 January 2017.