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Thailand to give market watchdog power to probe fraud in bid to boost confidence

Bloomberg
Bloomberg • 2 min read
Thailand to give market watchdog power to probe fraud in bid to boost confidence
The benchmark SET Index has dropped almost 4% so far this year, putting it among Asia’s worst performers, after falling 15% in 2023. Photo: Bloomberg
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Thailand plans to empower its market regulator to investigate criminal activities in the nation’s securities markets after a series of corporate scandals eroded investor confidence.

Proposed legal changes will give the Security and Exchange Commission the authority to probe suspected illegal conduct, said Kitipong Urapeepatanapong, chairman of the Stock Exchange of Thailand. The amendments will speed up imposing charges and punishment against violators, he said. 

Thai authorities are looking to bolster rules and controls on listed companies and stock trading after corporate frauds, including irregularities at Stark Corp., dented investor confidence.

Prime Minister Srettha Thavisin has urged regulators to improve their oversight after about US$94 billion ($127.05 billion) of market value was wiped off the nation’s equities from a peak in 2023. 

“We want to demonstrate that punishment of wrongdoers will be quick and tough to scare them off,” Kitipong, who was appointed as the bourse’s new chairman last week, said in an interview. “Justice delayed is justice denied.”

See also: SGX RegCo launches public consultation to facilitate shareholder-requisitioned general meetings

The SEC currently can only file complaints to police of suspected criminal activity such as insider trading, stock manipulation and corporate fraud in Thailand’s markets, Kitipong said. Probes are typically lengthy due to investigators’ limited resources and expertise, he said.

The stock exchange, SEC, finance ministry and other law enforcement agencies are working closely to accelerate amending statutes to strengthen capital market supervision, the enforcement of regulations and punishments, according to Kitipong.

The benchmark SET Index has dropped almost 4% so far this year, putting it among Asia’s worst performers, after falling 15% in 2023.

See also: MAS slaps 12-year prohibition order against former Manulife Financial Advisers representative for cheating

International investors have withdrawn almost US$2 billion from local equities in 2024, adding to outflows of US$5.5 billion in the previous 12 months. 

Cable wire maker Stark Corp. defaulted on its debt last year after revealing accounting irregularities and leaving holders of almost 40 billion baht ($1.47 billion) of liabilities facing imminent loss and its shares almost worthless. Several of the company’s former executives have been charged with wrong doing.

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