Following a referral from the Stock Exchange of Thailand (SET) and the SEC’s further investigation, the findings revealed offenses committed by the 14 offenders, consisting of 12 co-principals (1st-12th offenders), and two supporters allowing their trading accounts to be used by others (13th-14th). The group jointly manipulated the KC share price during 5 January – 19 February 2015, causing the price and trading volume of KC shares at that time to deviate from normal market conditions with the intention of persuading other investors to buy or sell the shares as well. The acts were carried out in an organized manner, with roles divided among the participants, for the benefit of the group of offenders. The misconduct involved:  (1) contacting a group of existing shareholders to purchase a big lot of KC shares for the purpose of reselling them at a higher price to one of the offenders after the share price had been manipulated, by entering into a Sale and Repurchase Agreement (REPO agreement); (2) procuring funding for the purchase of the big lot of KC shares; (3) manipulating the price of KC shares in preparation for entering into the REPO agreement; and (4) selling the KC shares acquired under the REPO agreement at a higher price after the price manipulation.

Such conduct constitutes a violation of Section 243(2) of the Securities and Exchange Act B.E. 2535 (1992). The Act, as amended by the Securities and Exchange Act (No. 5) B.E. 2559 (2016), continues to prescribe this conduct as an offense under Section 244/3, liable to the penalties under Section 296 of the Securities and Exchange Act (the law in effect at the time the offense was committed), in conjunction with Section 83 and Section 86 of the Criminal Code, as the case may be. The group of offenders obtained benefits totaling 149.86 million baht. The SEC has therefore filed criminal complaints against all 14 individuals with the DSI for further legal proceedings.

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

Concurrently, the SEC has reported these legal proceedings to the Anti-Money Laundering Office (AMLO) for consideration of further action because such offenses are unfair activities related to securities trading, which constitute a predicate offense under the Law on Anti-Money Laundering B.E. 2542 (1999).   

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.

Note:
* Untrustworthy Characteristics under 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.