The Securities and Exchange Commission (SEC) is finalizing revisions to its self-reporting system for shareholding disclosures following a recent incident involving potentially inaccurate filings. The regulator is exploring measures to bolster the accuracy and credibility of information submitted through its disclosure platforms, aiming to prevent similar issues from recurring and ensure investor confidence.
Review of Shareholding Disclosure Process Underway
Anek Yooyuen, deputy secretary-general and spokesman for the SEC, confirmed that the agency is in the advanced stages of evaluating evidence gathered from a joint investigation with the Economic Crime Suppression Division (ECD) of the Royal Thai Police. This inquiry focused on an individual who was listed in SEC filings as the owner of a significant 7% stake in the telecommunications giant True.
The case drew considerable attention from the investment community due to the public release of the disclosure through the SEC’s official reporting system, even as questions arose about the filer’s legal standing to report such a substantial shareholding. Notably, the same individual also reportedly filed claims of significant ownership in other prominent blue-chip companies, including major financial institutions like Bangkok Bank and Kasikornbank, as well as entertainment and aviation firms such as Major Cineplex, Asia Aviation, and G J Steel.
True executives stated they had no prior knowledge of Supaporn Phimpong, the individual in question, being a shareholder in their company. This lack of awareness further fueled concerns about the veracity of the submitted information.
Investigation and Findings
Mr. Anek detailed that the SEC and ECD interviewed Ms. Supaporn on July 10 as part of their comprehensive investigation. The analysis of the information obtained during this interview is ongoing to determine if any violations of securities laws occurred. “The information gathered will be used to assess what offences, if any, may have been committed,” he stated.
The investigation has reportedly uncovered indications that inaccurate information may have been intentionally submitted. This raises significant concerns regarding the reliability of filings that investors depend on to make informed investment decisions. The SEC had previously flagged irregularities in the filing and issued a market alert on July 3, clarifying that the information was preliminary and subject to verification. The disclosure was subsequently withdrawn by the filer.
This incident has spurred calls for enhanced controls over the reporting process. The primary concern is that investors might have acted upon the information before its problematic nature was identified and addressed by the regulator.
Enhancing Accuracy and Timeliness
In response to these concerns, the SEC is actively considering additional measures to improve the accuracy and credibility of data disseminated through its disclosure systems. The agency has been soliciting feedback from a wide range of stakeholders, including investors, market participants, media organizations, and other industry bodies, regarding potential improvements.
“We take these concerns seriously and will consider all suggestions,” Mr. Anek assured. “Our goal is to ensure that information disclosed through our systems is accurate and that similar incidents do not occur again.”
Regarding potential revisions to the Form 246-2 disclosure process, which pertains to the acquisition or disposal of significant shareholdings, Mr. Anek highlighted the delicate balance the SEC must maintain. “The challenge is finding the appropriate balance between speed and verification,” he explained. While timely disclosure of material information is crucial for investors to make informed decisions, overly extensive verification requirements could delay the release of vital data.
Improving Verification and Alerts
The SEC is exploring innovative ways to expedite its information verification capabilities and to promptly issue alerts to investors when irregularities are detected. “The focus is on enhancing the efficiency of our verification process and ensuring investors are informed as early as possible when concerns arise,” Mr. Anek said. The agency plans to thoroughly review all submitted proposals to determine the necessary additional safeguards.
When questioned about whether Ms. Supaporn acted as a nominee shareholder, Mr. Anek declined to comment, stating that the matter remains under active investigation. The SEC’s current findings underscore significant concerns about the submission of inaccurate data to the regulator and its subsequent entry into the electronic disclosure system. “Other potential offences require further in-depth investigation,” he added.
Responsibility for Disclosure
Filings under Form 246-2 are based on information directly submitted by individuals legally obligated to report transactions involving significant shareholdings. “Under the law, the responsibility lies with the person acquiring or disposing of shares to submit the information,” Mr. Anek emphasized. “Once the filing is received, it is disclosed to the public.” This principle places the onus on the reporting individual to ensure the accuracy and legitimacy of the information provided.
The SEC’s proactive review and consideration of enhanced controls signal a commitment to maintaining the integrity of its disclosure systems and protecting the interests of investors in the capital markets.
