Shares of Taokaenoi Food and Marketing Plc (TKN) plunged by nearly 10% on Tuesday as Itthipat “Tob” Peeradechapan announced his resignation as the company’s chief executive and director following civil sanction measures imposed by Thailand’s Securities and Exchange Commission (SEC) for insider trading violations.
In its filing to the Stock Exchange of Thailand (SET), TKN acknowledged the SEC’s announcement on Monday, which disclosed civil penalties against five individuals for insider trading of TKN shares.
The seaweed snack company reported that it was reviewing the facts and gathering information from all relevant parties to ensure compliance with corporate governance principles. TKN said the allegation does not affect the company’s ongoing business operations.
By midday Tuesday, TKN’s share price had fallen by 9.9% to 4.64 baht, with a total trading value of 145 million baht following the news.
Trading violations
The SEC said that information provided by the SET in March 2023 prompted the regulator to conduct a further investigation, which found sufficient evidence against five individuals. According to the SEC, Mr Itthipat, Nutchatpong Peeradechapan (former managing director for business support), Phanida Wiriyakitnukul, Thitirat Panuwatvanich and Jakkaphan Sardpreechar engaged in insider trading of TKN shares between Aug 5 and Nov 9, 2022.
The SEC found that the individuals had access to material non-public information concerning TKN’s third-quarter 2022 earnings, which recorded a net profit of 179.97 million baht – a significant increase – along with a special interim dividend of 0.08 baht per share. These undisclosed developments were likely to influence the company’s share price.
Evidence showed Mr Itthipat purchased TKN shares through Mrs Phanida’s trading account, while Mr Nutchatpong executed share purchases via accounts belonging to Ms. Thitirat and Mr. Jakkaphan, prior to the public disclosure of the information on November 10, 2022, according to the SEC.
Penalties
Consequently, the regulator’s civil sanctions committee imposed a fine of 11,601,063 baht on Mr Itthipat, as well as a 20-month ban from serving as a director or executive of any listed or securities company.
Mr Nutchatpong was fined 2,916,030 baht and given a 14-month ban from executive positions. Mrs Phanida was fined 625,197 baht and given a 13-month ban from executive roles, while Ms Thitirat and Mr Jakkaphan were fined 625,197 baht each and ordered to serve nine-month bans from holding director or executive roles.
The SEC said all fines and reimbursements are to be remitted to the Ministry of Finance as state revenue.
Ban periods begin once offenders sign consent agreements. Refusal will result in the SEC requesting prosecutors to file civil lawsuits seeking maximum penalties.
Fines and compensation will be remitted to the Ministry of Finance as state revenue.
TKN reported that it is reviewing facts from all parties to proceed according to law and good corporate governance and will report further developments.