Thai Exchange boosts surveillance to restore investor confidence

THE Stock Exchange of Thailand plans to tighten market supervision to restore investor confidence after unusual trading in a mid-size stock led to regulatory sanctions against two local brokerages.

Trading in More Return, which led to the stock being suspended, involved an unanticipated “rare fraud incident”, Pakorn Peetathawatcha, the stock exchange’s president, said on Friday (Nov 18). His comments came after Thailand’s Securities & Exchange Commission’s on Thursday temporarily suspended Asia Wealth Securities’ operations for allegedly using clients’ funds without their consent.

“We are assessing our weaknesses and loopholes to prevent any repeat of this incident,” said Pakorn. “This is a wakeup call for more improvement and strengthening.” 

Thailand’s regulator and authorities are probing transactions of More Return stock that reportedly led to more than US$111 million of payment defaults by an investor to several brokerages. Trading of More Return shares has been suspended since Monday by the bourse. 

Calls to Chanachai Joonjiraporn, the chief executive officer of Asia Wealth, weren’t immediately answered.

Several securities brokerage firms filed police complaints against a More Return investor, who defaulted on paying for shares bought last week, the Bangkok Post reported on Thursday, adding that an investigation into the transactions is now underway. 

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Asia Wealth’s suspension for violating trading rules is an “isolated case” and other brokerages are able to continue operating as usual, according to Pakorn. 

More Return’s stock posted a two-day slide of 51 per cent through Nov 11, before it was suspended. BLOOMBERG