The Stock Exchange of Thailand has rejected International Engineering Plc's (IEC) appeal for the bourse to discontinue its partial trading ban on IEC stock, saying stock trading was not a matter for the company's management.

Suthichai Chitvanich, executive vice president of the SET, told a press conference yesterday that IEC's management had submitted a letter to the SET on March 21 requesting that the SET not extend its prohibition on trading by net settlement or margin loans in IEC stock.

The SET started subjecting IEC stock to trading restrictions last year to thwart possible speculation, and extended its 60-day prohibition for the fourth time on March 22.

Net settlement is a short-term trading practice allowing investors to buy and sell stocks within one day, and margin loans allow investors to trade stocks on credit.

Suthichai said the SET had considered the company's appeal and reasoned that the prohibition, which is related to stock investors and the trading system, is not a concern for the company's management, whose duty is to look after shareholders' interests.

He said the SET's measure was in line with Securities and Exchange Commission (SEC) data showing that IEC has been on a "turnover list", reflecting  high trading volume.

The net settlement and margin loan prohibition has been implemented since 2000 as a means to protect investors as well as the trading system from damage.

Suthichai said the SET considered trading volume, stock prices, market capitalisation of stocks compared to the market capitalisation of the market, trading conditions, and news and information relevant to companies when deciding to implement the trading prohibition.

Investors should carefully consider IEC stock trading, he added. So far IEC's shareholder count has risen significantly from about 3,000 to 5,000 since the company raised capital via for four separate private placements from May last year to January.

He compared IEC's case with that of Picnic Corp Plc, whose shareholders increased from about 500 in 2003 to more than 10,000 last year. However, he did not elaborate.

Picnic's former executives were charged by the SEC of accounting fraud last year.

"So, investors should consider on their own about what's going on," Suthichai said.

IEC earlier complained to the SET that its partial trading prohibition was obstructing the company's attempt to raise capital via private placement, as potential partners would be suspicious about the firm.

The SET told the company it should proceed with its capital-augmentation plan, as the SET's ban has nothing to do with the company's capitalisation. 

Siriporn Chanjindamanee

The Nation