Following a referral from the Stock Exchange of Thailand (SET) in September 2020 and the SEC’s further investigation, it was found that directors and executives of LPN were aware of inside information regarding LPN’s interim dividend payout for 2020 at the rate of 1 baht per share from retained earnings – the highest dividend since LPN’s listing on the SET. From 2015 to 2019, LPN had paid dividends twice per year, each time not exceeding 0.60 baht per share. This information was considered material inside information likely to affect the price or value of LPN shares, and had not yet been disclosed to the public.

From its investigation, the SEC found six instances of wrongdoing involving securities trading by persons who knew or possessed inside information prior to its disclosure to the SET on 22 May 2020, as well as cases where individuals allowed others to use their securities trading accounts to conceal the identity of the actual traders, as follows:

(1) Mr. Tikhamporn, then Vice Chairman of LPN, purchased LPN shares using the securities trading account of his son, Mr. Thanat, while in possession of inside information. This conduct violated Section 242(1) in conjunction with Section 243(1) and Section 297, Paragraph 2, of the Securities and Exchange Act B.E. 2535 (1992) (“SEA”), in conjunction with Section 90 of the Penal Code. Mr. Thanat’s act constituted a violation under Section 297, Paragraph 1, of the SEA;

(2) Mr. Wuttiphon, then Vice Chairman, Chairman of the Audit Committee, and Independent Director of LPN, while in possession of inside information, together with his son, Mr. Arthit, purchased LPN shares in Arthit’s trading account. This conduct violated Section 242(1) in conjunction with Section 243(1) of the SEA and Section 83 of the Penal Code; 

(3) Mr. Suriya, son of Mr. Wuttiphon, together with Mr. Rattanapong, purchased LPN shares in Rattanapong’s trading account in a manner inconsistent with normal practice, thereby falling within the definition of insider trading. Their conduct violated Section 242(1) in conjunction with Section 244(3) of the SEA and Section 83 of the Penal Code;

(4) Mr. Surawut, then Director, Executive Director, and Chief Strategy Officer of LPN, while in possession of inside information, together with his sister, Miss Nawarat, purchased LPN shares in Nawarat’s trading account. Their conduct violated Section 242(1) in conjunction with Section 243(1) of the SEA and Section 83 of the Penal Code; 

(5) Mrs. Malatee, mother of Mr. Surawut, purchased LPN shares in her own account in a manner inconsistent with her usual trading behavior, thereby falling within the scope of insider trading. This conduct violated Section 242(1) in conjunction with Section 244(3) of the SEA; 

(6 Mr. Pichet, then Director of LPN, while in possession of inside information, together with his sister-in-law, Mrs. Kanrawee, purchased LPN shares in Kanrawee’s trading account. Their conduct violated Section 242(1) in conjunction with Section 243(1) of the SEA and Section 83 of the Penal Code. 

The aforementioned offenses are subject to penalties under Section 296, Paragraph 1, Section 296/2, and civil sanctions under Section 317/4, Section 317/5(1)(2), and Section 317/11, Paragraph 1, of the SEA, as applicable.  

The Civil Sanction Committee (CSC) resolved to impose civil sanctions* on the 11 offenders, which include civil penalties, compensation for the benefits received or to be received, reimbursement of the SEC’s investigation expenses, and a bar from serving as directors or executives of securities issuing companies or securities companies, as follows:   

(1) Mr. Tikhamporn is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 4,361,872 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 14 months; 

(2) Mr. Thanat is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 137,849 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for four months;

(3) Mr. Wuttiphon is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 2,664,864 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 20 months; 

(4) Mr. Arthit is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 2,664,864 baht, and is barred from serving as a director or executive of securities issuing companies and securities companies for 12 months; 

(5) Mr. Suriya is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 925,019 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 12 months; 

(6) Mr. Rattanapong is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 973,489 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 12 months;

(7) Mr. Surawut is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 2,323,219 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 14 months;

(8) Miss Nawarat is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 643,849 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 12 months; 

(9) Mrs. Malatee is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 783,549 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 12 months; 

(10) Mr. Pichet is required to pay a civil penalty, compensation for the benefits received or to be received, and reimbursement of the SEC’s investigation expenses, totaling 1,025,599 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 20 months; 

(11) Mrs. Kanrawee is required to pay a civil penalty, compensation for the benefits received, and reimbursement of the SEC’s investigation expenses, totaling 1,025,599 baht, and is barred from serving as a director or executive of securities issuing companies or securities companies for 12 months.

The civil sanctions above will take effect upon the offenders’ signing in agreement 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 those 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.  

Note:  

* Section 317/1 of the Securities and Exchange Act B.E. 2535 (1992), as amended by the Securities and Exchange Act (No. 5) B.E. 2559 (2016), allows for civil sanctions to be imposed for criminal offenses under this Act.  

Details of civil sanctions and associated procedures are available at:  https://www.sec.or.th/EN/pages/lawandregulations/civilpenalty.aspx