The Stock Exchange of Thailand (SET) yesterday lifted the trading suspension for Group Lease (GL) stock, saying the company had clarified important information amid an ongoing regulatory scandal on concealed transactions.
"[The] SET requires investors to monitor information before making [any] investment decisions," said the SET in a statement.
The bourse did not mention what kind of information GL had provided.
GL shares tumbled considerably as investors embarked on a sell-off. Shares of GL closed yesterday at 15.50 baht, down 6.60 baht, or almost 30% off the previous closing price, in trade worth 133 million baht.
GL is in the process of selecting a qualified person to take the vacant director's position and will appoint the company's new chief executive and chairman of the board of directors soon. The company will hold a board of directors meeting today to discuss this issue.
"The company would like to confirm that operations will not be affected on account of how [former chief executive] Mitsuji Konoshita stepped down from those positions at the company," said GL in a statement.
"The company has sufficient cash flow and a strong balance sheet, which will allow it to operate as usual."
SET-listed GL is a digital finance company specialising in hire purchase financing for Japanese motorcycle brands.
The resignation of GL's chief executive has shaken investor confidence, while the company's ability to build up future revenue and profit could be derailed due to the current regulatory scandal, said Usanee Liurat, executive vice-president of Asia Plus Securities.
"The company has received interest rate income of about 2 billion baht from loans given to subsidiary companies, [but] the question is whether this transaction was transparent or not," said Ms Usanee.
"The case remains unfinished and follow-up monitoring is needed despite resumed trading of GL shares. We [still] don't know if the market regulator will impose more penalties for other executives and the company's board of directors."
On Monday, the Securities and Exchange Commission (SEC) filed a criminal complaint to the Department of Special Investigation against Mr Konoshita, alleging fraud, misappropriation of company assets and falsification of accounting through concealed transactions involving associated overseas companies of GL.
In a press release, the SEC said concealed transactions were made through several associated companies abroad to exaggerate GL's operating results.
"[Mr] Konoshita had ordered Group Lease Holding Co Ltd (GLH), a subsidiary of GL based in Singapore, to issue loans to several foreign companies," the SEC said.
The regulator pointed to evidence that GLH had issued loans to four registered companies in Cyprus and another in Singapore worth US$54 million (1.78 billion baht), with Mr Konoshita serving as the controller and ultimate benefactor.
After receiving the loans from GLH, the five debtor companies transferred the money within companies of the lender's group to repay the interest and principal to GLH in an instalment, the SEC said.
The interest payments were recorded as income in GLH's financial statements, which constitutes fabrication of GL's accounting records and exaggeration of its operating results, said the SEC.
Separately, the SET has required Inter Far East Energy Corporation Plc (IFEC), KC Property Plc (KC), and Polaris Capital Plc to submit their financial statements for the first quarter ending March 2017 by Nov 13.
"A non-compliance sign will be posted for a period of 180 days from the date of such an announcement," said the SET statement.
"In case the companies are still unable to submit their financial statements within 180 days from the date of announcement, the SET may consider the delisting of their securities."
Four issuers -- KC, IFEC, Rich Asia Corporation Plc, and Energy Earth Plc -- failed to redeem short-term corporate bonds and bills of exchange worth 3.75 billion baht in the three months to June, while overdue debt instruments remain unpaid, according to the Thai Bond Market Association.
