Institutional investors have investigated over 500 companies and vowed to pour investment into a select group showing proven good governance, in their bid to boost the private sector's fight against corruption.
Members of the Association of Investment Association Companies (AIMC), the Thai Life Assurance Association (TLAA) and the Association of Securities Companies (ASCO), plus the Government Pension Fund and Social Security Fund, yesterday announced their anti-corruption commitment.
They vowed not to invest in listed companies that lack good governance, social responsibility or were involved in corruption.
Together, these institutions, with over Bt6 trillion in combined assets, expect their actions will help lift good governance among listed companies.
Vorawan Tarapoom, president of the Association of Investment Management Companies, which had combined assets of over Bt2.8 trillion as of February, said the association wanted to help enhance standards of the Thai market for international acceptance. As CEO of Bualuang Asset Management, Vorawan said her company had a clear plan to only invest in firms with a promising future and transparency.
“From over 500 listed companies, only 80 are eligible for our investment. Transparency is expected to improve over time,” she said.
The Thai Life Assurance Association, with 90 company members, now has over Bt1.9 trillion in assets. Investment in the stock market totals Bt250 billion, said Pravej Ongartsittigul, secretary-general of the Office of Insurance Commission (OIC).
“It has been our policy to pour investment only into companies with proven transparency, to assure clients that their investment is well protected,” he said.
For the Government Pension Fund, which has Bt580 billion in assets, the number of eligible companies totals 396. Sopawadee Lertmanuschai, secretary-general of the fund, said these companies must win at least three stars in terms of good governance rating. Others are those included in the SET50 and SET100 categories.
“Listed companies’ shareholders meetings will be our focus. We will send our representatives to attend the meetings and we’re ready to exercise the rights to veto, if the executives are suspected of non-transparent decisions,” she said.
Jeerasak Sukhonthachart, secretary-general of the Social Security Office, said all investor friendly firms show good corporate government and he promised to strengthen the investment criteria. With total assets of over Bt800 billion, the fund invested Bt100 billion in the stock market last year.
“We plan to increase the portfolio investment from 10 per cent of assets to 12 per cent, to cash in on the positive performance of the stock market,” he said. SSO’s board of directors recently backed an increase in overseas investment by US$400 million, from $700 billion now. Average return this year is expected to reach 7.2 per cent.