Bangkok, 16 October 2017 ? The SEC has filed a criminal complaint against Mr. Mitsuji Konoshita, an executive of Group Lease PLC. (GL), with the Department of Special Investigation (DSI) for committing fraud, misappropriating the company's assets and falsifying accounting records by executing concealed transactions through several associated companies abroad to exaggerate the company's operating results.
With reference to the annual financial statements for the year 2016 wherein the auditor made a note on the loan transactions with foreign debtors which subsequently increased GL operating results, the SEC investigated further and found that Mr. Konoshita ordered Group Lease Holding Co., Ltd. (GLH), a subsidiary of GL based in Singapore, to issue loans to several foreign companies.
Evidence showed that GLH had issued loans to four registered companies in Cyprus and another one in Singapore, in the total amount of approximately US$54 million dollars with Mr. Konoshita as the controller and the ultimate benefactor. After receiving the loan money from GLH, the five debtor companies transferred the money within the companies of the lender's group to repay for the interest and the principal to GLH in installment. The amounts of the interests were recorded as income in the GLH's financial statements, which was considered fabrication of accounting records and exaggeration of GL operating results.
Mr. Konoshita's misconduct above is deemed an execution of concealed transactions, asset misappropriation, permission of false accounting transactions and preparation of incorrect accounting records. In addition, he informed and disseminated false statements, which caused an impact on the GL securities price and investors? investment decisions. Such information also contradicted the information GL had disclosed through the Stock Exchange of Thailand on 13 March 2017 and his statement at the press conference the following day when he reassured that the foreign borrowers were unrelated to him.
As a result, he is liable to failure to perform duties responsibly, carefully and honestly under Section 307, Section 308, Section 311, Section 312 and Section 313 and Paragraph 2 of Section 281/2 in conjunction with Section 89/7, which may lead to imprisonment from 5 to 10 years and a double fine based on the asset value or the benefit received from violation of such sections, as the case may be, but in any case not less than 500,000 baht, in accordance with the Securities and Exchange Act B.E. 2535 (1992) and Section 240 of the Securities and Exchange Act (No. 5) B.E. 2559 (2016). The SEC therefore filed the criminal complaint with the DSI for further proceedings.
Because of the criminal complaint, Mr. Konoshita is liable to having untrustworthy characteristics as director and executive of any issuers and listed companies in accordance with the SEC Notification* and therefore is banned from holding such positions under the Securities and Exchange Act.
In the meantime, the SEC is investigating other persons related to the GL case above.
In this regard, his offenses are deemed market misconduct related to securities trading under the Securities Law, and may be deemed an asset misappropriation under the Penal Code which is a predicate offence under the Prevention and Suppression of Money Laundering Act. The SEC has therefore informed the Anti-Money Laundering Office for further action regarding relevant matters.
In any case, filing a criminal complaint commences the criminal justice administration whereby the consideration whether a defendant is guilty is under the DSI's investigation, the public attorney's prosecution, andthe court's jurisdiction, respectively.
The SEC has received assistance from Cyprus Securities and Exchange Commission in investigating and gathering important facts and evidence for the prosecution of the case.
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* The Notification of the Securities and Exchange Commission No. Kor Jor. 3/2560 Re: Determination of Untrustworthy Characteristics of Company Directors and Executives dated 23 January 2017.
Information contained in this news release is as of the aforementioned release date. For those who wish to see current status of the matter,
please go to compliant filed with inquiry officer