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Thailand’s securities regulator said on Thursday that the eldest son of Thaksin Shinawatra, the Thai prime minister, apparently violated stock market disclosure and mandatory tender offer rules after he acquired a large stake in Shin Corp from his father in late 2000.
However, Thirachai Phuvanat-Naranubala, secretary-general of Thailand’s Securities and Exchange Commission, said Panthongtae Shinawatra, and his younger sister, Pintongta Shinawatra, did not engage in insider trading in Shin Corp shares in the days before Singapore’s Temasek Holdings took over the conglomerate on January 23.
“From our preliminary findings, it is likely that Panthongtae will be found guilty of failing to disclose information about changes in shareholding,” Mr Thirachai said in a nationally televised press conference.
He did not specify which transactions may have entailed reporting requirements, but under SEC law, any changes in shareholding above or below 5 per cent incremental thresholds must be disclosed.
Mr Thirachai said if the findings on non-disclosure were confirmed, Mr Panthongtae would be subject to a fine.
However, the SEC chief added: “We have concluded that the [Temasek takeover] deal does not involve insider trading.”
Temasek paid Bt73bn to buy a 49 per cent stake of Shin Corp from Mr Shinawatra’s children and other family members, in the largest corporate takeover in Thai history.
Since then, the sale has come under heavy scrutiny, while an outcry over the Shinawatra family’s massive tax-free profit threatens to inflict heavy political damage on the prime minister, who has long portrayed himself as a champion of the poor.
Stock market regulators, and the Thai public, have focused much of their attention on the sale by Ample Rich, a British Virgin Islands-registered holding company, of an 11 per cent stake in Shin Corp to Mr Thaksin’s son and daughter for Bt1 per share, just three days before the Temasek takeover.
The SEC asked the two on Monday to clarify their relationship with Ample Rich, which was established by Mr Thaksin in 1999.
Suvarn Valaisathien, a tax lawyer and adviser to the Shinawatra family, subsequently came out to publicly defend the premier’s children, saying they were the owners of Ample Rich, and that their January 20 transaction was not insider trading, but part of the family’s long-time plan to repatriate Shin Corp shares held offshore back to Thailand.
Mr Thirachai on Thursday said he agreed that Mr Panthongtae’s and Ms Pintongta’s January 20 acquisition of shares from Ample Rich was not a case of insider trading since they did already own the shares indirectly, but disagreed with the claim that the SEC had been properly notified when Mr Panthongtae acquired Ample Rich from his father in December 2000.
Mr Thirachai said the SEC only had a confidential July 2001 letter stating that Mr Thaksin had sold Ample Rich to his eldest son, but this was received as part of an earlier probe into alleged asset concealment, and not the equivalent of a formal, public notification.
Since then, Mr Panthongtae likely violated a requirement that he make a formal, public notification to the SEC of significant changes in his shareholding level at Shin Corp, as well as an obligation to launch a mandatory tender offer for outstanding Shin Corp shares when his own holding in the firm exceeded 25 per cent.
There was no immediate comment from Mr Suvarn, Mr Thaksin or his family on Mr Thirachai’s remarks.