The good name of the SEC hangs in the balance

08 February 2006

Thirachai (second from right) and Kittiratt (right): "What are they doing there at the Finance Ministry?"

Thirachai Bhuvanatnaranubala, the secretarygeneral of the Securities and Exchange Commission, is in the hot seat. He is nowhere to be seen

during this tumultuous period rocking the SEC. As the Shin Corp scandal is turning into a big mess, Thirachai can’t find his balance.
Will the SEC really mean business by going after Prime Minister Thaksin Shinawatra and his two children Panthongtae and Pinthongtha over

their murky transactions involving the Shin Corp stocks? Both Panthongtae and Pinthongtha are having a difficult time explaining their involvement with Ample Rich, incorporated in the British Virgin Islands. And all of a sudden, there emerged another Ample Rich, incorporated
as a British company. Shin stocks were traded actively by the Ample Rich twins in the period leading to Temasek’s Bt73.2 billion takeover of Shin Corp.

Did the two children of the prime minister properly report their ownership in Ample Rich? Did they violate the disclosure rules of the SEC? Did they violate the takeover rules of the SEC? Did they use insider information to trade Shin Corp stocks? Do they have any document to support their claim that they really had owned Shin Corp through proper transactions?

These are the questions for which the SEC must demand clear answers.
If Thirachai decides to get tough on this deal, his job will be at risk.
But if he treats the Shin Corp stock scandal as a nonissue, he will risk tarnishing not only his own image but also the longstanding reputation of the independent SEC.
Finance Minister Thanong Bidaya is casting a large dark shadow over the SEC. As chairman of the SEC, Thanong has the clout both to defend the PM and to steer the SEC to serve political ends.

It is no secret that Thirachai has always aimed to become the next governor of the Bank of Thailand. Any slipup will cost him the opportunity to serve the central bank, where he had spent most of his brilliant career before moving out to become the secretarygeneral of the SEC. He is up against the question: can one really write one’s own destiny?
But Thirachai’s duty and responsibility is to serve the law. The SEC has rules and regulations to guard the stability and fair play of the capital market. If it flunks this test, its reputation will be irreparably harmed.

Last week Thirachai made his way to the Finance Ministry along with Kittiratt Na Ranong, the president of the Stock Exchange of Thailand, to seek clarification over the Shin deal.
Well, that was the end of it. What business was he supposed to do with the Finance Ministry? Kittiratt, as always, has been a perfect reader of the political wind.

If you were the SEC’s secretarygeneral, and you were supposed to maintain the independence of the SEC, you would never bow to the influence of the Finance Ministry, which serves the interests of the executive branch. These people at the top just don’t know their lines of responsibility.

With Thirachai’s hesitation to take charge directly over the Shin Corp scandal, the Thai public has seen Chalee Chanthanayingyong, the assistant secretarygeneral of the SEC, doing Thirachai’s job instead. Chalee came out to ask tough questions right after Dr Suvarn
Valaisathien, the lawyer of the Shinawatra and Damapong families, tried to clarify the murky transactions between Ample Rich and Pinthongtha and Panthongtae.

Chalee: Ummmm.....Shin deal is not OK yet

Chalee asked that Pinthongtha and Panthongtae submit to the SEC evidence that they owned Ample Rich before this company sold them 329.2 million stock shares of Shin Corp for Bt1 apiece on January 20.

He gave the pair seven days to reply. Pinthongtha and Panthongtae have missed their deadline.
In the aftermath of the Shin scandal, Thanong came out to assure the public that the transactions were legal and exempt from taxation. How did he know all the details of the Bt73.2 billion transactions, which had been structured in such a torturously complicated way?

Chalee signalled to reporters that he would like to have more information about the deal.

Thanong, the chairman of the SEC, said the Shin deal is okay, while the assistant secretarygeneral said it is not okay yet because the Shinawatra siblings need to supply further evidence.

What is going on in this country?