SEC files DSI case against PO­LAR over debt doubts


The Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) has ac­cused Po­laris Cap­i­tal Plc (PO­LAR) ex­ec­u­tives of cre­at­ing an ar­ti­fi­cial debt of 3.6 bil­lion baht with the in­ten­tion of en­ter­ing the com­pany into a busi­ness re­ha­bil­i­ta­tion plan, along with fal­si­fy­ing doc­u­ments and ac­count­ing state­ments.

The ac­cused in­clude five Po­laris ex­ec­u­tives, four other in­di­vid­u­als and two com­pa­nies: Simba In­ter Co Ltd and United Trad­ing Group Co Ltd.

The mar­ket reg­u­la­tor has filed a case with the Depart­ment of Spe­cial In­ves­ti­ga­tion (DSI).

“The SEC’s ac­cu­sa­tion is the be­gin­ning of crim­i­nal pro­ce­dures,” the SEC said in a re­lease. “Un­der this process, de­ter­min­ing whether a per­son is an of­fender de­pends upon the DSI, the pub­lic pros­e­cu­tors’ or­ders and the Court of Jus­tice’s dis­cre­tion, re­spec­tively.”

Apart from the com­plaints made about Po­laris’s busi­ness prac­tices, the SEC said it spot­ted Po­laris ex­ec­u­tives be­hav­ing ques­tion­ably in last year’s sec­ond quar­ter.

Af­ter in­ves­ti­gat­ing the rel­e­vant in­for­ma­tion, the SEC found that the nine in­di­vid­u­als and two com­pa­nies had jointly col­lab­o­rated in wrong­do­ing in 2017.

Po­laris ex­ec­u­tives forged a debt of 3.6 bil­lion baht by us­ing an un­named third party, which had a fal­si­fied debt amount, in a bid to sue for high-value dam­ages, ac­cord­ing to the SEC.

The move was an at­tempt to de­ceive the gen­eral pub­lic into be­liev­ing that Po­laris had shoul­dered sub­stan­tial li­a­bil­i­ties in a short pe­riod, sub­se­quently re­sult­ing in as­sump­tions that the com­pany was on the verge of in­sol­vency and needed to en­ter a busi­ness re­ha­bil­i­ta­tion plan, the SEC said.

Ul­ti­mately, Po­laris’s true cred­i­tors were not paid and Po­laris’s ac­tion was deemed an of­fence for im­ped­ing debt re­pay­ment.

The third party could also file a claim for bankruptcy pro­ceed­ings, whereby Po­laris’s as­sets were or­dered by the Cen­tral Bankruptcy Court into a re­ceiver­ship.

The ma­noeu­vre is re­garded as an at­tempt to em­bez­zle Po­laris’s as­sets, ac­cord­ing to the SEC.

The board of di­rec­tors meet­ing held by Po­laris ex­ec­u­tives to de­cide upon the com­pany’s busi­ness re­ha­bil­i­ta­tion pe­ti­tion and the man­ner in which Po­laris in­formed the Stock Ex­change of Thai­land about the pe­ti­tion were deemed as ploys to de­ceive in­vestors and share­hold­ers about the com­pany’s fi­nan­cial con­di­tion and busi­ness per­for­mance, the SEC said.

The SEC in Fe­bru­ary re­quested that the Civil Court im­pose a 2-mil­lion-baht fine on Yan­nakorn Warakun­rak and Poon­sak Chum­chuay, two ex­ec­u­tives at Po­laris, and bar them from be­com­ing di­rec­tors at listed com­pa­nies for 10 years on the grounds of in­for­ma­tion con­ceal­ment and halt­ing busi­ness op­er­a­tions.

Po­laris was al­ready sub­ject to de-list­ing on Nov 14, 2017 be­cause it failed to sub­mit fi­nan­cial state­ments for the first quar­ter of 2017 within 180 days.

The com­pany stated ear­lier that it could not pre­pare or sub­mit fi­nan­cial state­ments for last year’s first quar­ter be­cause of its re­ceiver­ship sta­tus. As a re­sult, a share­hold­ers’ meet­ing could not be held to ap­point au­di­tors and es­tab­lish the au­dit fee.

In May 2017, Po­laris in­formed the SET that it had filed a busi­ness re­ha­bil­i­ta­tion pe­ti­tion, which was later with­drawn.

The firm was later dis­cov­ered to be un­der a court-or­dered re­ceiver­ship, which sig­nif­i­cantly af­fects share­hold­ers’ rights.

PO­LAR shares have been sus­pended from trad­ing since March 1, 2017 due to Po­laris’s fail­ure to sub­mit fi­nan­cial state­ments and pro­vide ex­pla­na­tions for in­vest­ments, in­clud­ing the pur­chase of land on Pha­hon Yothin Road, and the can­cel­la­tion of an in­vest­ment in Day Poet Co Ltd, the pub­lisher of A Day and Ham­burger mag­a­zines.

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