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SEC cooperates with DSI in the investigation of EARTH coal mining cases and files a criminal complaint against EARTH and its three responsible directors



Thursday 26 December 2019 | No. 190 / 2019


Bangkok, 26 December 2019 – The SEC has filed a criminal complaint against Energy Earth Public Company Limited (EARTH) and its three responsible directors with the Department of Special Investigation (DSI) for failing to submit documents or reports and concealing material facts that should have been disclosed, in violation of the SEC’s order issued by virtue of Section 58 (1) of the Securities and Exchange Act (SEA), and publishing misleading statements about material facts of EARTH.

The SEC is also working with the DSI in accordance with the bilateral Memorandum of Understanding for Cooperation to investigate EARTH’s suspicious acquisition of the legal rights over coal mines in Indonesia. The legal action in the case of EARTH has already been notified to the Anti-money Laundering Organization (AMLO). 

The criminal complaint has been filed against EARTH and its three directors, namely (1) Mr. Sawin Chindakul, (2) Ms. Paradee Teawanitchakul, and (3) Mr. Noppadon Chaidarun in order for the DSI to conduct further legal proceedings in the case of EARTH’s violation of the SEC’s order issued under Section 58 (1), which is liable to the offenses under Section 274 and Section 281/10 in conjunction with Section 58 (1) of the SEA, and the case where EARTH disclosed misleading statements related to material facts of the coal mines in Indonesia, which is liable to the offenses under Section 240 of the SEA. In addition, the three directors above who were responsible for EARTH’s commission of the offenses are subject to the criminal complaint under Section 300 of the SEA.

The criminal complaint against the four offenders is in relation to the SEC’s order issued by virtue of Section 58 (1) of the SEA whereby EARTH had to clarify and disclose information on the true existence of the legal rights and the result of the re-assessment of the fair value of two coal mines in Indonesia according to the assessment report prepared by EY Corporate Advisory Services Limited (EY), who was the rehabilitation planner of EARTH at the time. EARTH acquired the legal rights over the coal mines by trading the assets of EARTH Group of Companies at the approximate total value of 24 billion baht. However, EARTH failed to submit documents or reports in accordance with the SEC’s order. In addition to the violation of the said order, EARTH was deemed to have concealed material facts which should have been stated to investors.  
 
On 7 February 2019, EARTH disclosed via the Stock Exchange of Thailand (SET) the value of the legal rights over the two coal mines, worth approximately 25.1 billion baht and 29 billion baht, according to the assessment reports of two appraisal companies which EARTH claimed to have hired directly. However, the inspection of the two assessment reports showed that EARTH had included the amount of coal that could not be produced for sale and was not under the mining right due to expiry of the concession, in the calculation of the total value of EARTH’s legal rights over the coal mines. In addition, it was revealed that EARTH would begin the coal mining in 2019 and 2020, respectively even though on the disclosure date, EARTH had a liquidity issue and it did not appear clearly that EARTH would be able to raise fund for starting the coal mining as planned. Such acts are liable to dissemination of materially misleading information. 

In addition, the SEC and the DSI are collaborating under the MOU officially signed on 15 July 2019 to investigate and seek evidence and facts related to suspicion of other possible offenses in case of EARTH’s acquisition of the legal rights over the coal mines in Indonesia. Meanwhile, the SEC has already notified the legal action under the SEA to the AMLO, which is deemed a predicate offense under the amended Anti-money Laundering Act B.E. 2542 (1999).
 
In any case, filing a criminal complaint commences the criminal justice administration process whereby the consideration of whether the defendant is guilty is under the DSI’s investigation, the public attorney’s prosecution, and the court’s jurisdiction, respectively.