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Published on September 6, 2007

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"Upon examination of the said financial statement, the SET found certain transactions that should be connected transactions," the SET said in a statement. "They may require information details of these transactions via the SET or the convening of a shareholders' meeting to approve the transactions. However, the SET found that Mida may not be in compliance with the rules concerning connected transactions."

The troublesome loans are one for Bt269.4 million plus accrued interest issued by its subsidiary to its directors and another for Bt25.5 million loan and accrued interest granted by Mida Leasing to IMCC, the SET said.

The loan granted to the subsidiary's directors carries 10-per-cent interest per annum, with interest payments made monthly. That loan, which comes due in June 2009, is secured by 1.28 million shares in the company, or 22.1 per cent, that belong to the directors.

"The loan by Mida's subsidiary to its directors may be a connected transaction that requires convening a shareholders' meeting for approval. However, the SET has not found proof of compliance with the rules concerning connected transactions by Mida. The SET, therefore, requires Mida to clarify additional information," the SET said.

The stock exchange has ordered Mida to submit information about the type of business of the Mida subsidiary that offered the loan to its directors; the names of the major shareholders and directors; a list of directors who are borrowers; connections between Mida, its subsidiary and the subsidiary's directors; and the source of the funds used by the subsidiary.

The SET requires further details about the transaction, including the necessity and reasons for the loans to the subsidiary's directors, the names of those who approved the loan and the opinion of the board and the audit committee concerning this transaction.

"If this transaction is found to be a connected transaction at the date of entering into it, has Mida complied with the rules concerning connected transactions? What policy will Mida put into place to comply with the mentioned rule?" the SET said.

For the loan to IMCC, the SET has ordered Mida to explain the nature of the business of the borrower and the names of the major shareholders and directors. The opinion of the board and the audit committee concerning the transaction, loan details, the necessity and reasons for the transaction and the due date are also required.

The Nation