Guidelines back shareholder rights

Capital market regulators have jointly issued guidelines for shareholders to exercise their right to convene a shareholders’ meeting, aiming to empower shareholders in circumstances where company executives refuse to hold such a meeting.

The Securities and Exchange Commission (SEC), the Stock Exchange of Thailand (SET) and Thailand Securities Depository Co Ltd (TSD) issued the guidelines in accordance with Article 100 of the Public Limited Company Act of 1992, the SEC said in a release.

Such a move also marks greater clarity in the Securities Act of 1992 and is consistent with the Business Development Department’s guidelines issued earlier this month on shareholders’ right to set up a shareholders’ meeting, the SEC said.

“The SEC, the SET and TSD see the importance of exercising the [shareholders’] right and want to facilitate convenience among shareholders to set up a meeting in case the board of directors refuses to hold such a meeting,” said SEC secretary-general Rapee Sucharitakul. “We have jointly issued guidelines related to the securities law to support the use of shareholders’ right to collectively resolve problems which can arise and help businesses proceed with their operations.”

The prolonged conflict over setting up a meeting for shareholders of Inter Far East Energy Corporation Plc is a case in point: IFEC’s chief executive has continuously refused to set up a shareholders’ meeting.

The crisis has stretched on for a year and six months, leading investors to take matters into their own hands despite having market regulators in place.

The guidelines for shareholders to exercise their right to convene a meeting include broad dissemination of information, whereby the SET will facilitate this by providing information about meetings via the bourse’s information system.

The record date, which determines shareholders’ right to attend a meeting, will be permitted to be determined by shareholders themselves. They will have to notify TSD of the closing date of the book of shareholders’ registration and the date of the shareholders’ meeting.

If there are several shareholders exercising their right under Article 100, they can authorise a person to act on their behalf.

Shareholders will also be able to immediately request a copy of shareholders’ registration as proof of share ownership from TSD.

TSD will prepare documents and send invitation letters to all shareholders, but they are required to pay expenses to TSD in advance.

The company’s board of directors is also responsible for resolving shareholders’ resolutions. For example, if shareholders approve a capital increase, the board of directors is liable to inform about the timing of the capital increase or payment of the capital increase.

We have jointly issued guidelines related to the securities law to support the use of shareholders’ right to collectively resolve problems. RAPEE SUCHARITAKUL SEC SECRETARY-GENERAL