Guilty execs must pay price over insider-trading scandal

Two other persons were also fined Bt333,333.33 each for aiding and abetting the insider trading.

The SEC release also named the six penalised persons – three of whom were executives of CP All and Siam Makro. Among them was Korsak Chairasmisak, currently vice chairman of CP All and executive director of Siam Makro. However, he has not shown any accountability to the shareholders, like many others did when they were involved in scandals.

There have been scandals in the past involving executives of listed companies and related securities businesses that were slapped with “criminal” and “social” sanctions by the SEC for different violations.

In many cases, the executives were legally forced to quit their posts, especially if the SEC filed a criminal complaint against them. 

But this case is an exception, with fines imposed on those found guilty without the imperative to resign.

The release revealed that findings showed share-purchase transactions by those six individuals from April 10-22, 2013, which was the period when CP All was in negotiations with SHV Nederland BV to acquire a majority stake in Siam Makro. The negotiated price was also higher than the market price.

Korsak, however, told reporters the following day that he intended to continue in his posts at both companies even though he accepted the SEC’s decision. He reasoned that he had “honestly” made a mistake, and that he had acquired the Siam Makro shares with an unconcealed stock trading account before the Charoen Pokphand group purchased the shares. The CP group was negotiating and then assigned CP All to conclude the transaction later. 

SEC secretary-general Rapee Sucharitakul recently commented that whether executives who have been sanctioned should stay or quit their positions depended on how well they could explain their situation to investors. 

This could be a hint that investors should take further steps towards checks and balances to ensure good corporate governance in listed companies.

In this case, one senior executive continues to hold high office despite being fined for insider trading, but there has been very little criticism of this behaviour.

The case of Korsak stands out, as CP ALL – operator of the country’s largest convenience-store chain, 7-Eleven – is one of the top performers in terms of “good” corporate governance as ranked by institutional investors in addition to its good business results.

The Association of Investment Management Companies (AIMC) has so far played an appropriate role by raising the issue of higher standards of social ethics. The association has been pushing for Korsak to take responsibility by resigning from his posts.

AIMC chairwoman Voravan Tarapoom said recently that good corporate governance was the foundation of the capital market, reflecting both quality and confidence of investors in the organisations.

“Good performance or good |corporate governance is not a |choice; both are needed to make organisations perfect,” she said.

Moreover, she said on Wednesday that if there were no action she would ask CP All to hold an extraordinary meeting of shareholders to consider this matter. If there is still nothing, the individual investors may propose that the annual general shareholders’ meeting to be held next year remove all of its board members.

It remains to be seen how many will still be in the fray to demand action on this issue of ethics.

How about the Stock Exchange of Thailand? Should the organisation play a bigger role as a regulator, especially on insider-trading scandals involving executives of listed companies?