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The 2006 Asian Roundtable on Corporate Governance Implementation and Enforcement Revisited Waratchya Srimachand Securities and Exchange Commission, Thailand.

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Presentation on theme: "The 2006 Asian Roundtable on Corporate Governance Implementation and Enforcement Revisited Waratchya Srimachand Securities and Exchange Commission, Thailand."— Presentation transcript:

1 The 2006 Asian Roundtable on Corporate Governance Implementation and Enforcement Revisited Waratchya Srimachand Securities and Exchange Commission, Thailand Session 1 Case Studies on Implementation and Enforcement of Rules Part 1: A case in Thailand Bangkok, Thailand September 2006 The views expressed in this paper are those of the author and do not necessarily represent the opinions of the OECD or its Member countries or the World Bank

2 Why considered successful? Prolonged inflated share price with linkage to politician Reflection in financial statement Short enforcement time Reassure workability of existing system Auditors Regulator Law enforcement agencies Repercussion on trading of other shares and credibility of the suspects

3 Key Success Factors Auditor performed their role – make comments on irregular transactions – SEC monitoring scheme SEC’s review of financial statements Power to order for a special audit Power to share information with an auditor Cooperation from firm Task force working style at the investigation agency Commitment from the top

4 Remaining Issues Inflated selling price ̶ Reliance on criminal offense - burden of prove beyond reasonable doubt Damage from loan loss provision ̶ Sanction on present management Remedies for investors

5 Future Steps Law amendment for ̶ Sanctions for breach of fiduciary duties ̶ Administrative sanctions on management of listed firms ̶ Civil penalties ̶ Class action

6 PICNI 2003 – 2006 XR 1.20 SP SEC ordered For special audit Issue revised F/S - profit dropped 67% SEC filed complaint

7 Enforcement Timeline Mar 1 Submission of 2004 F/S Mar 30 Start investigation Mar 29 Order for Revision of F/S May 11 Order for Special audit Jun 30 Submission of Revised F/S filed criminal complaint Oct 12 DSI submitted to public prosecutor Oct 25 Case filed to Court Dec 20 First trial Surveillance + investigation 7 months 2005


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