AIA, the country's biggest life-insurer, was granted a provident-fund management licence by the Securities Exchange Commission (SEC). It has 27 provident funds worth Bt15.8 billion under management.

According to the SEC's report, the watchdog investigated AIA's provident-fund management last month.

It found that AIA's organisational structure in terms of risk of conflict of interest was inadequate.

AIA was fined Bt323,750.

The report revealed that AIA's provident-fund investment division was under the same management team as its own investment portfolio, which had not been reported to the regional compliance department.

The SEC added that AIA's staff were responsible for the insurance portfolio were also involved with the investment-compliance section.

However, after the investigation, AIA responded quickly.

It shifted its investment operations, which had been under the insurance section, to the provident-fund division.

The investment-compliance section was moved to the business-surveillance section.

The SEC also found that AIA's voting policy did not meet all SEC regulations.

For this AIA was fined Bt119,500, as the company did not provide voting guidance to its investment committee and its report on how voting was exercised was unclear.

The watchdog found that there was no documentation to prove that the voting was exercised properly. Also, the disclosure of its voting report was incor-rect.

The SEC revisited the insurer two weeks ago, but the results of that have not yet been revealed.

AIA senior vice president Sutti Rajitrangson said the company had had no intention of violating SEC regulations.

"Some people in management did not comply with SEC rules. The fines were normal procedure when this was discovered. However, we have reacted quickly and implemented everything the SEC suggested," Sutti said.

Piyarat Setthasiriphaiboon

The Nation