No. 016 / 2018
Monday 26 February 2018
Bangkok, 26 February 2018 – The SEC has filed a criminal complaint against Mr. Wichai Thavornwattanayong, former chairman of Inter Far East Energy Corporation Public Company Limited (IFEC), with the Economic Crime Suppression Division (ECSD) on the ground of performing duties dishonestly when he failed to disclose IFEC default on its bills of exchange.
In addition, the SEC has instructed IFEC directors and the persons whom IFEC identified as director via the Stock Exchange of Thailand (SET) to solve the company’s problems urgently and to disclose their individual clarifications to the public within seven days or by 5 March 2018.
While being IFEC chairman, Wichai failed to have the company clarify to the SET the issue of B/E default circulated in the news at the time, which has caused IFEC to be suspended from trading on the SET since 12 January 2017. This incident, however, worked for Wichai’s benefit because his IFEC shares of more than 57.46 million used as the collateral for the his margin trading were not subject to forced selling. As a result, Wichai could remain an IFEC shareholder and exercise the voting right to select company directors at three shareholders’ meetings in 2017.
Wichai’s misconduct in violation of Section 170 of the Securities and Exchange Act B.E. 2535 (1992) (SEA) was dishonest duty performance that caused damage to the company or created a benefit for himself, as specified under Section 89/7 and Paragraph 2 of Section 281/2 of the SEA. The SEC has therefore filed the criminal complaint against Wichai with the ECSD for further proceedings.
On 5 September 2017, Wichai, also as IFEC chairman, was named in the SEC’s another criminal complaint filed with the ECSD on the ground of acting dishonestly to seek unfair benefits for himself or other persons by using a wrongful voting method for director selection. This case is in the judicial consideration process.
In addition, on 14 November 2017 the SET announced that IFEC might be liable to delisting because IFEC failed to prepare and submit the company’s financial statements within the period specified by the SET. In addition, the company had failed to make debt repayment to its creditor within deadline and was consequently sued by the creditor.
These issues arose from the fact that (1) IFEC was void of chairman to perform the duty of calling a Board of Directors meeting legally, and (2) the legitimacy of the majority of the company directorship was still a subject of legal consideration. In this regard, IFEC proceeded to exercise its legal right to request for the Court to appoint a person to perform the duties of company chairman but was objected by certain IFEC shareholders.
Meanwhile, the company’s situation is unresolved, and the current directors have yet to come up with a solution.
The SEC views that IFEC directors should solve the problem immediately for the best interest of the company and its shareholders; one option is to hold a shareholders’ meeting based on a lawful procedure and method, as soon as possible to allow the shareholders to nominate and elect the persons viewed by the majority shareholders to be suitable directors.
In this regard, the SEC, by virtue of Section 58 of the SEA, requires that IFEC directors and the persons whom IFEC identified as director via the SET clarify individually as to how to solve the current issue and disclose such clarification via the SET within seven days or by 5 March 2018. Failure to proceed accordingly may subject IFEC directors or such persons to be in contravention of Section 89/7 of the SEA and a supporter to such offence.
Concurrently, the SEC is inspecting the case of IFEC’s investment money in a renewable energy project, as raised by investors, and other complaints; any person’s act found to be liable to any offence under the SEA shall be subject to legal proceedings in due course.
In any case, filing a criminal complaint against Wichai commences the criminal justice administration whereby the consideration whether the defendant is guilty is under the inquiry officer’s investigation, the public attorney’s prosecution, and the court’s jurisdiction, respectively.
In addition, being named in the complaint has caused Wichai to have untrustworthy characteristics of the director and executive of issuing and listed companies1 and is therefore banned from holding such positions.
1 Clause 3(1) in conjunction with Clause 4(3) and (6) 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.