Following a referral from the Stock Exchange of
Thailand (SET) in November 2016 and the SEC’s subsequent investigation, the
findings and evidence indicated reasonable grounds to believe that, during
March – August 2016, six individuals – namely (1) Mr.
Winai Teawsomboonkij, TFG Chairman of the Board of Directors, Chief Executive
Officer and Director, (2) Mr. Nuttawut Teawsomboonkij,
TFG shareholder with more than 5 percent holding of the registered capital, (3) Mr. Wuttipong Wangsomboondee (or
Mr. Wuttipong Rattananon), (4) Miss
Panida Trongthammakit, (5) Miss Kanyarat
Trongthammakit, and (6) Miss Woranart Wangsomboondee
– purchased TFG shares and TFG-W1 warrants using non-public information related
to TFG’s operating results for the first and second quarters of 2016. These
results showed significant growth, with net earnings of THB200.81 million and
THB670.73 million, respectively. Such material information, which indicated a
positive impact on the price of TFG shares, had not yet been disclosed to the
public. The individuals either traded in TFG and TFG-W1 securities themselves
or facilitated the securities purchases of other persons based on this inside
information during two separate periods, as follows:
Incident Period 1: During 1 March – 12 May 2016, Winai
and Nuttawut purchased TFG shares, using inside information concerning TFG’s
operating results for the first quarter of 2016, through their securities
trading accounts. In addition, Winai purchased TFG shares using such inside
information through the securities trading accounts of Wuttipong and Panida,
with Winai being the beneficiary of the benefits arising from those trading
accounts. Such actions constituted a violation of Section 241 of the Securities
and Exchange Act B.E. 2535 (1992) (“SEA”) as in force at the time of the
offenses, or Section 241 in conjunction with Section 241, Paragraph 2(2), of
the SEA (as the case may be), in conjunction with Section 83 of the Criminal
Code.
As for Wuttipong and Panida,
they aided or abetted Winai in purchasing TFG shares using such inside
information, which constituted a violation of Section 241 of the SEA in
conjunction with Section 86 of the Criminal Code.
Incident Period 2: During 25 May – 10 August 2016
(morning trade period), Winai and Nuttawut purchased TFG
and TFG-W1 securities using inside information related to TFG’s operating
results for the second quarter of 2016 through the trading account of Nuttawut.
In addition, Winai purchased TFG and TFG-W1 securities
using such inside information through the trading accounts of other four
persons, namely Wuttipong, Panida, Kanyarat, and Woranart. Such actions of
Winai and Nuttawut constituted a violation of Section 241 of
the SEA, as in force at the time of the offenses, or Section 241, in
conjunction with Section 241, Paragraph 2(2) of the SEA, (as
the case may be), in conjunction with Section 83 of the Criminal Code.
As
for Wuttipong, Panida, Kanyarat and Woranart, they aided or abetted Winai in
purchasing TFG and TFG-W1 securities, using such inside information, which
constituted a violation of Section 241 of the SEA in conjunction with Section
86 of the Criminal Code.
The actions of all six offenders constituted a
violation of Section 241 of the SEA, subject to penalties under Section 296 of
the same act, as in force at the time of the offenses. Currently, the SEA, as
amended by the SEA (No. 5) B.E. 2559 (2016), continues to prescribe that such
conduct constitutes an offense under Section 242, subject to penalties
stipulated under Sections 296 and 296/2 of the SEA. In this regard, the
transitional provision under Section 47 of the SEA, as amended by the SEA (No.
5), prescribes that the State may apply civil sanctions against all six
offenders, with penalties not exceeding the penalty rates prescribed by the law
in force at the time of the offenses, namely civil penalties and compensation at
an amount equal to the benefits received or to be received (if any).
The Civil Sanction Committee (CSC) has therefore
resolved to impose civil sanctions on all six offenders for the offenses
committed during the two incident periods, as follows:
(1) Mr. Winai Teawsomboonkij is required to pay a
civil penalty and compensation at an amount equal to the benefit received or to
be received, totaling THB1,122,195,148.15;
(2)
Mr. Nuttawut Teawsomboonkij is required to pay a civil penalty of THB1,000,000;
(3) Mr. Wuttipong Wangsomboondee
and Miss Panida Trongthammakit are required to pay a civil penalty of THB666,666.66
each; and
(4) Miss Kanyarat Trongthammakit
and Miss Woranart Wangsomboondee are required to pay a civil penalty of THB333,333.33
each.
The civil sanctions above (i.e., civil penalties and compensation at amounts
equal to the benefits received or to be received), as imposed by the CSC, will
take effect when the offenders sign a letter of consent to comply. Otherwise,
the SEC will submit the case to the public prosecutor for filing a lawsuit in
the Civil Court to seek an imposition of civil sanctions with the maximum
applicable statutory penalties, which shall not be lower than the civil
sanctions specified by the CSC.
In all cases, civil penalties and compensation for
the benefits received or to be received from committing offenses shall be
remitted to the Ministry of Finance as public revenue.
The CSC's decision to impose a civil penalty against
Winai, who served as director of a listed company, has resulted in him being characterized
as possessing untrustworthy characteristics to serve as a listed company director
or executive under Clause 3(2) and Clause 5(2) of the 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. As
a result, he is barred from serving as director or executive of listed companies.
The SEC, by virtue of Clause 6(2) of Notification No. Kor Jor. 3/2560, has
determined a period of lacking trustworthiness due to the two offenses
mentioned above to be a total of 40 months, starting from 26 December 2025.