Vichai Benjapalaporn, chief financial officer of Live Incorporation, said in a statement in response to the Stock Exchange of Thailand's demand for clarification of the investment that the subsidiaries had been granted loans from the company for business expansion and investment aiming to increase the company's revenue-generation channels.

He insisted that the subsidiaries had established an investment policy, guidelines and criteria for investment in securities, authorised persons and risk-management guidelines.

The SET on Monday instructed Live Incorporation together with Bliss-Tel to disclose their policies concerning investment in securities following significant investments in the first quarter.

The SET said that as at end-March, Live Incorporation had a loss of Bt24.54 million from current investments and this accounted for 48.08 per cent of its first-quarter net loss of Bt51 million.

According to Live Incorporation's quarterly financial statement, it invested in six securities: Bliss-Tel, Power Line Engineering, Adkinson Securities, EMC, EMC warrant 1 and Navanakorn warrant 1. The company suffered its biggest net loss - to the tune of Bt15.86 million - from investment in Bliss-Tel stock.

Live Incorporation yesterday insisted that its subsidiaries had set up risk-management measures for cash management, both short-term and long-term investment. There are also investment criteria, including a limit of investment in securities of Bt150 million.

The company reasoned that with the high percentage of investment per total assets of 26.46 per cent, it would like a higher return from investments in securities and bonds compared to deposits at financial institutions.

Separately, the SET said earlier that Bliss-Tel had investments in securities worth Bt220.28 million, accounting for 19.37 per cent of its total assets.

In its quarterly financial statement, Bliss-Tel reported investment in Live Incorporation totalling Bt29.18 million and securities receivable amounting to Bt191.1 million, resulting from sales of securities prior to the end of the accounting period and within the T+3 period.

The SET has asked Bliss-Tel to identify the criteria for its investment decision-making, as Live has been mired in operational losses since 1997 and has never paid a dividend.

Attavit Ektanitphong, managing director of Bliss-Tel, clarified yesterday to the SET the criteria for his company's investment decision-making.

Bliss-Tel said that as of April 3, International Engineering (IEC) had 19.33 per cent of the stock of Bliss-Tel and 1.09 per cent of the shares in Live Incorporation. Therefore, Live Incorporation is classified as a co-shareholder.

Bliss-Tel said that although Live Incorporation had reported its operating losses and not paid dividends since 1997, Bliss-Tel hads considered that Live was a high-liquidity security or a trading stock, so there is potential to gain on its investment. Furthermore, Live Incorporation also has a clear turnaround plan and its business trend is looking better.

As Bliss-Tel and Live Incorporation have as co-shareholders IEC, and the SET requested the firm to clarify guidelines for elimination of conflict of interest, Bliss-Tel said that having co-shareholders was beyond its awareness.

Furthermore, these co-shareholders are not the controlling parties of the company and Live Incorporation, and both companies have operated entirely different businesses. Therefore, the company is of the opinion that there should not be any conflict of interest over its investment.