SET warns IEC and Bliss-Tel to improve internal controls
The Stock Exchange of Thailand (SET) yesterday warned International Engineering (IEC) and Bliss-Tel to improve operations and internal controls to bring them in line with listed companies' standards and be careful about information disclosures that might affect investors' decisions.
The warnings were issued after a series of SET orders demanding both companies disclose additional information about their transactions. Earlier, the two listed firms agreed that Bliss-Tel would issue 47 million capital-increase shares in exchange for assets belonging to IEC subsidiary IEC Mobile. The SET had earlier demanded both companies review IEC Mobile's asset evaluation, because it was based on a report submitted by Seamico Securities. However, the contract between Bliss-Tel and Seamico to appoint an adviser to prepare the asset-evaluation report was not endorsed by signatures of authorised officials of either company. On Wednesday, IEC and Bliss-Tel informed the SET that the IEC Mobile asset-evaluation report had not affected the decision-making of either company's board of directors. The SET said IEC and Bliss-Tel should be more careful in preparing information for the public and improve its operation and internal controls to be in line with standards of information disclosure for listed companies. The SET added that the two companies should consider accuracy when disclosing relevant information to the public, in order to prevent misunderstandings among investors. Even if the companies have their officials prepare information, their directors remain responsible for accuracy. "If the directors' signatures endorse the accuracy of the information, but some information might not be correct, those directors might be considered to lack caution in carrying out their duties and need to be accountable, as well," the SET said in a statement. The SET added that investors used listed companies' information for making decisions. Thus, the information disclosed to the public is significant. With distorted information, investors might wrongly evaluate the financial status of IEC and Bliss-Tel. The sale of IEC Mobile assets at a price of Bt211.5 million was different from the book value and the agreed price of Bt201 million. The difference will be booked as IEC Mobile's assets and consequently boost IEC's net profit. Bliss-Tel, which paid for the assets by transferring its capital-increase shares to IEC, will have its assets and shareholders' equity increase by Bt211.5 million. Siriporn Chanjindamanee The Nation
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