Watchdog investigates alleged disclosure violations in Shin Corp deal

Commission follows offshore trail of Shin trading, says still no explanation for apparent disclosure violations

As the Securities and Exchange Commis-sion (SEC) pieces together the puzzle of who really owned the Shin Corp Plc shares moved around by offshore agents, the finger increasingly points to violations of disclosure laws by the prime minister’s children.

“We have contacted the custodians and asked them to confirm their holdings of Shin shares. They also have to clarify if they traded Shin shares,” SEC secretary-general Thirachai Phuvanart-naranubala told a press conference yesterday.

Within a week, the watchdog should have the answer on the movements of Shin’s stock among the custodians’ holdings, he said after a SEC board meeting at which the investigation was reported. Finance Minister Thanong Bidaya, who is the SEC chairman, was absent from the meeting.

The Democrat Party earlier asked on whose behalf did Vickers Ballas & Co, a Singaporean stockbroker, and UBS Bank Singapore Branch, a custodian, conduct transactions in Shin shares between themselves and with the Shinawatra family’s Ample Rich Investments Co Ltd.

The Thai telecom holding company was recently taken over by Temasek Holdings of Singapore.

Back in August 30, 1999, Prime Minister Thaksin Shinawatra sold 32.92 million Shin shares at Bt10 apiece to Ample Rich, incorporated in the tax haven of the British Virgin Islands. But in July 21, 2000, Ample Rich’s Shin stake was reduced by 10 million shares to 22.92 million shares. The 10 million shares showed up in Vickers Ballas’s account. Vickers Ballas was also found to have bought 1.56 million Shin shares from July 21 to September 1.

The Democrats found that Vickers Ballas held the 11.56 million Shin shares for only eight months before the broker’s name disappeared from the authorities’ share registration record.

Subsequently, a company referred to as Ample Rich (“English”) in a Thai document and UBS AG Singapore Branch emerged on the scene. In April 10, 2001, Ample Rich (“English”) held 10 million Shin shares, while UBS AG Singapore Branch had 5.4 million.

Last week Suvarn Valaisathien, the Shinawatra family’s lawyer, said Ample Rich had never traded the Shin shares but admitted that it had used Vickers Ballas of Singapore as a broker to hold the shares, before changing to UBS Singapore Branch for custodial services.

He also issued a statement denying the existence of a second Ample Rich. On Tuesday, Thanong said there was only one Ample Rich.

Democrat MP Korn Chatikavanij said yesterday that, as a brokerage, Vickers Ballas trades stocks, while UBS Singapore Branch is a custodian.

“Are they custodians? By their behaviour, they are not,” he said. If they were the names of the investors who parked their shares with the brokers would be disclosed to the Thailand Securities Depository Co Ltd and not recorded in the names of the brokers, he explained.

The SEC’s tracing of the transaction trail could clear up outstanding questions. If Vickers Ballas is a custodian, why did it receive only 10 million Shin shares, and not all the 32.9 million shares that Ample Rich owned? And if UBS is a custodian, why in 2001, did it inform the SEC that it bought 10 million shares from Ample Rich at Bt179 per share? A custodian’s job is limited to storing an investor’s shares in the investor’s name.

“In what capacity did Vickers Ballas and UBS act and whom did they serve? If they served the Shinawatra family, the beneficial owner must be Panthongtae. Then, it is worth asking where he got the money to buy those shares [from Ample Rich] and to where the proceeds from selling the shares went. Is there proof that the money was really wired to Panthongtae’s account?” Korn asked.

The SEC said that aside from reaching a conclusion on the custodians’ role, next week it would also rule on the number of firms named Ample Rich involved in the deals and whether Panthongtae and his sister Pinthongta ignored tender offer requirements.

“It is not yet determined if both companies are a single entity. There is also a possibility that they [Panthongtae and Pinthongta] breached the law [Article 246]. If they are found breaching the law, they will be fined,” Thirachai said.

The SEC demands a public filing for every ownership change of five percentage points in a listed company. Violators are subject to a fine of Bt500,000 plus Bt10,000 a day from the day the offence was committed. As both failed to report the ownership change in 2000, the accrued penalties are estimated at about Bt20 million. Thaksin’s wife Pojaman was fined Bt6 million for a similar offence.

Earlier this month the SEC cleared the two children of insider-trading allegations tied to the Shin Corp sale.

The SEC probe comes at a crucial time when senators and the opposition are delving into Thaksin’s involvement with Ample Rich. The Constitution Court will today decide whether it will rule on the senators’ claim that, because of his control over Ample Rich, Thaksin is no longer qualified to be prime minister.

Siriporn Chanjindamanee

The Nation