Bangkok Air stock hit by price manipulation scandal

BANGKOK – The news of the resignation of Thai billionaire Prasert Prasarttong-osoth of the Bangkok CEO Dusit Medical Services and vice president of Bangkok Airways following allegations of stock manipulation, hit Monday the actions of the two companies.

Shares of Bangkok Airways fell by 7.14% to 11.70 baht each, while those of Bangkok Dusit Medical Services fell 8.47% to 21.60 baht each. Both stocks significantly underperformed the Thai benchmark, which recorded a marginal gain of 0.29% on Monday.

Prasert, his daughter Poramabad and another leader, Narumon Chainaknan, were fined 499.45 million baht ($ 15.8 million) on Friday by the Securities and Exchange Commission of Thailand for manipulating the course price. Bangkok Air Action. The SEC stated that the penalty showed that the offenders were "untrustworthy" and had to leave their counseling position.

All three resigned from their positions on Monday "for the purpose of good corporate governance". Poramabad was the main office of Bangkok Dusit. However, they also specified that they would appeal charges to prove their innocence.

The SEC and the Thai Stock Exchange reported that the company's executives traded and matched Bangkok Air's shares from November 13, 2015 to January 12, 2016, raising shares by 22.5% over the period.

Prasert founded Bangkok Dusit, Thailand's largest private hospital operator, with 46 hospitals and 8,011 beds under its management. The company is the nucleus of the medical tourism industry in Thailand.

The hospital group faces stiff competition from IHH Healthcare, the largest group of hospitals in Asia in terms of market value, according to FactSet data. The market capitalization of Bangkok Dusit stood at $ 11.7 billion on Friday, just below that of IHH at $ 12.1 billion.

Prasert's son and the director of the airline, Puttipong, were not involved in the case and remain in place. However, an badyst at Country Group Securities said: "This [scandal] This will obviously hurt corporate governance and the image of the airline. We must carefully monitor the response of the portfolio management companies to the company. If they decide to sell their badets, the fall [in the stock] can accelerate. "

The SEC tightened regulations in 2016 and 2017 to impose tougher penalties for unfair commercial practices. In 2015, the president and two vice-presidents of Thailand's largest convenience store operator, CP All, and a vice president of telecommunications company True Corp. were fined 34 million baht for insider trading. They retained their posts, so the SEC did not have the power to remove them.

"This case reaffirms the importance of corporate governance and explains how corporate directors must meet their fiduciary obligations and comply with high standards of conduct," Kulvech said. Janvatanavit, president of the Thai Institute of Directors, a professional badociation. "Failure to do so could result in severe penalties at the individual level and could also undermine stakeholder confidence … investors around the world are raising expectations of directors of publicly traded companies, not only to generate a favorable return, but also for morals. "