The Stock Exchange of  Thailand (SET) yesterday revoked its prohibition on intraday and margin-loan trading in the stock of International Engineering Plc (IEC), following an order from the Administrative Court.

The court early yesterday ordered the SET to lift the prohibition immediately, pending a ruling on legal action by IEC, which has asked that the ban be revoked. But IEC is also seeking Bt3.1 billion in damages from the SET for alleged harm done to the company as a result of the prohibition.

In its order lifting the prohibition, the court said that although intervention in securities trading is done to protect investors, it should not result in unfair treatment.

It said that authorities should act prudently when interfering in a particular stock's trading and the length of an intervention should not be too long, lest the business in questions suffers irreversible damage. It said a period of 30 days as a notional limit.

Because of irregular movements in both its share price and trading volume, IEC's stock was banned from net-settlement and margin-loan trading for the first time for 15 trading days between October 19 and November 9 last year.

The SET further suspended the stock from trading for five days between January 16 and January 20 after it found a web of unusual transactions connected with the stock and involving 33 alleged investors that boosted both the share price and the trading volume.

The suspect transactions, carried out between September 2005 and January, saw IEC shares jump more than 278 per cent from Bt1.29 to Bt4.88.

The transaction value also rose from Bt666.4 million in September to Bt5.186 billion in December, up 678 per cent. The share price made another 51.64 per cent jump between January 3 to January 13, closing at Bt7.80.

Today's court ruling overturned a 60-trading-day prohibition on intraday and margin-loan trading in IEC stock that was to last from March 22 to June 22.

Commenting recently on the SET's action, the Securities and Exchange Commission (SEC) said the SET's suspicions about the transactions were possibly justified, but it needed more evidence.

SET President Kittiratt Na Ranong rushed to say that the SET was ready to follow to the court's order. "Prohibiting IEC's stock from net-settlement and margin-loan trading is our responsibility. If we had not done so, we would have committed a wrongdoing," he said. "However, we are ready to comply with the decision."

Kittiratt said the SET would examine the details of the court's ruling before making any decision on an appeal.

The SET is not concerned that other listed companies might follow IEC's example, as each case has its own set of facts and circumstances.

If the court awards the Bt3 billion in damages that IEC is seeking the SET will follow the court's order, Kittiratt said.

IEC's stock yesterday bucked the market trend, rising 6.5 per cent to end the day at Bt4.56 from Bt4.28.

Meanwhile, the SET's executive vice president, Sopawadee Lert-manaschai, said stock exchange officials would meet with executives of listed companies to build up an understanding that it is the SET's duty to investigate irregularities in stock trading.

Separately, the SET yesterday suspended trading stocks of Power-P Plc and Easternwire Plc for one day to give investors more time to digest the reports of the companies' auditors after they failed to provide a conclusion about their financial statements.

Both stocks will resume trading today, but they will be have the NP (Notice pending) warning until both submit amended financial statements or the SEC allows them to leave the financial statements as they are.

Siriporn Chanjindamanee

The Nation