A DRIVE TO SCANDAL

Abstract

The case chronicles SECC’s progression from its early days, when it was perceived by consumers to be the leader in the imported automotive business, to its successful public listing in the Stock Exchange of Thailand in May 2006. Further described is how trading in the company’s initially perceived mundane shares received an extraordinary boost when in 2008, SECC’s management announced that the company had won the bid on the government’s NGV bus project.  With the worth of the project valued at more than 62,600 billion baht for the 4,000 buses that SECC was to procure for the government, the announcement was well received by the investing public. This announcement, the case demonstrates, became the impetus for the ensuing nearly unbridled speculation on the prices of SECC stocks by many investors in the market – speculation that continued virtually unabated right up to November 27, 2008, when pursuant to emerging new details concerning the misconduct of  SECC’s founder and chairman, Sompong Witthayaraksan (who was rumored to have fled the country), the Stock Exchange of Thailand (SET) announced that a (“SP”) had been placed on SECC stocks.

The case provides copious details of the various forms of fraudulent behaviors and other misconduct perpetrated by the company’s directors. Specifically, with results of an external auditor’s report on the internal operations of the firm, the Securities and Exchange Commission of Thailand subsequently charged the director and his accomplices with the following breaches of the Securities and Exchange Act.