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SEC files a criminal complaint against the former directors of ADAM and others, a total of eight persons, for malfeasance



Wednesday 17 April 2019 | No. 39 / 2019


Bangkok, 17 April 2019 – SEC files a criminal complaint against the former directors of Adamas Incorporation Public Company Limited (ADAM) and others, a total of eight persons, to the Department of Special Investigation (DSI) for the case of malfeasance in allowing ADAM to acquire the total amount of ordinary shares of Kitha Properties Co., Ltd. (formerly known as Siralai Co., Ltd.) (Kitha Properties) to the extent that ADAM has sustained damage.

SEC has alleged that the former directors of Adamas Incorporation Public Company Limited (ADAM) and others, a total of eight persons, namely (1) Mr. Boonpiam Eamroongroj (Chairman of ADAM at the time of committing the offense); (2) Mr. Chinnavat Chinsangaram (a director of ADAM at the time of committing the offense); (3) Mr. Sarawut Phumthavorn (an independent director and member of the Audit Committee of ADAM at the time of committing the offense), and a group of five other persons, namely (4) Mr. Nithamon Hadsadin Na Ayudhya; (5) Mr. Apichart Chansakulporn; (6) Miss Bongkorn Chansakulporn (or Miss Thanyaporn Chansakulporn at the time of committing the offense); (7) Mr. Sorawit Chansakulporn; and (8) Mrs. Suda Khunchak had jointly committed the offense by separating duties in order for ADAM to fraudulently acquire Kitha Properties to be a subsidiary of ADAM by purchasing the total amount of Kitha Properties’ ordinary shares in 2014, although they have already known that Kitha Properties was under investigation in a case initiated by the National Anti-Corruption Commission for being involved in the rice pledge scheme and the rice disposal scheme. Also, Kitha Properties is not fully qualified to be a listed company on the Stock Exchange of Thailand, due to its money laundering activities.  

ADAM has been damaged by this act, while the Chansakulporn Family, consisting of Mr. Apichart Chansakulporn, Miss Bongkorn Chansakulporn, and Mr. Sorawit Chansakulporn, has benefited from the use of the mechanism of the Stock Exchange in transferring the ownership of Kitha Properties from the original owner, being the Chansakulporn Family, to  ADAM, a listed company whose shares are held by the public.  At the same time, the Chansakulporn Family swaps shares of Kitha Properties for the shares of ADAM, which can be traded on the Stock Exchange.  This act was deceitfully planned with the Board of Directors of ADAM in exercising its power to sign the agreement to buy the shares of  Kitha Properties, arranging nominee to buy the shares of ADAM in the Stock Exchange with a view to gaining the majority of votes to control the business, exercising the shareholder right to add an agenda item on the date of an extraordinary meeting in order to approve the transaction on acquiring Kitha Properties, and swapping their shares, resulted in the transaction being binding with immediate effect.

The act of the former directors of ADAM and others, a total of eight persons, constituted offenses under the law whereby the persons under (1), (2), and (3) committed the offenses under Section 307 and Section 311 of the Securities and Exchange Act B.E. 2535 (1992) and the persons under (4), (5), (6), (7), and (8) assisted and supported them in committing the offenses, constituting offenses under Section 307 and Section 311, in conjunction with Section 315 of the Securities and Exchange Act, as the case may be.  In addition, the persons under (6) and (7) jointly controlled and/or used the securities trading accounts of others while they were the true beneficiaries, and acquired and held the securities of ADAM which increased or decreased by more than 5 percent and totaled 25% of the total voting rights of the business, without reporting and making a tender offer for securities as required by law.  SEC, therefore, filed a criminal complaint against these eight persons to the DSI for its consideration to take further legal action. The allegation shows that the accused are considered to be untrustworthy to perform duties as directors and executives of a securities issuing company and a listed company under the relevant notification. These persons, therefore, cannot perform duties as directors or executives of listed companies during the period they are being prosecuted.

In addition, the allegation by SEC are only the starting point of the criminal law enforcement process.  Under this process, in order to adjudicate whether a person has committed an offense will depend on the investigation under the authority of the Department of Special Investigation, the filing of action by the public prosecutor, as well as the discretion of the court of justice, respectively.

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