The Supreme Administrative Court yesterday upheld the power of the Stock Exchange of Thailand (SET) to prohibit intra-day and margin-loan trading in shares of International Engineering (IEC) earlier this year.

The decision, which followed a stock-exchange appeal, overturned an earlier ruling by the Central Administrative Court that temporarily revoked the SET's order against IEC shares.

The SET's lawyer, Supakorn Palakul, said the Supreme Administrative Court had agreed the stock exchange had a mandate to ban IEC shares from intra-day and margin-loan trading.

He said the court found that despite the prohibition, investors were still able to pile up the stock by cash transactions, and IEC's recapitalisation plan would proceed as normal.

IEC executive committee chairman Sumit Champrasit said yesterday's ruling would not affect his company's image or operations, because the company had acted transparently and followed SET regulations.

He said that from now on, the SET would consider implementing intra-day and margin-loan trading bans on the firm's stock more fairly.

He said his remark did not mean the SET under former president Kittiratt na Ranong acted unfairly but that working under new SET president Patareeya Benjapholchai was "better".

IEC shares closed yesterday at Bt1.57, down 1.87 per cent.

Sumit said the decline in IEC stock was a consequence of investors' concerns over the court's ruling.

Because of irregular movements in both its share price and its trading volume, the company's shares were banned from net-settlement and margin-loan trading for the first time, for 15 trading days, from October 19 to November 9 of last year. The SET again suspended the stock from trading this year, for the five days from January 16-20, after it found a web of unusual transactions connected with the stock, allegedly involving 33 investors, which had boosted both the share price and the trading volume.

The suspect transactions, carried out between September 2005 and January 2006, saw IEC shares jump 278 per cent - from Bt1.29 to Bt4.88.

The transaction value at that time also rose, from Bt666.44 million in September 2005 to Bt5.186 billion in December 2005 - a leap of 678 per cent. The share price made another 51.64-per-cent jump between January 3 and January 13, closing at Bt7.80.

Ahead of the Central Administrative Court's ruling, IEC shares were blocked from intra-day and margin-loan trading for 60 trading days, from March 22 to June 22.

Commenting on the case, Phillip Securities (Thailand) managing director Suchai Suthasthamkul said prohibiting stocks from intra-day and margin-loan trading was a measure to lower stock-speculation activities but that it hurt investors if the measure was used too often.

"Prohibiting stocks from intra-day and margin-loan trading should be implemented suitably, but I think the SET has good criteria," he said.

Siriporn Chanjindamanee

The Nation