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- Published: Monday, 16 February 2015 14:00
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SEC files criminal complaint against TUCC executives and accomplices for falsifying accounts and corporate fraud
The SEC filed a criminal complaint with the Department of Special Investigation (DSI) against nine alleged offenders for falsifying documents and accounts and corporate fraud, causing damages to TUCC during 2010-
2011. Those alleged offenders were (1) Yongyuth Ngamkaiwan, Director and CEO of Thai Unique Coil Center Plc. (TUCC); (2) Vacharee Ngamkriwan, TUCC Director and Deputy CEO; (3) Suchit Rungcharoenchai, Ex-TUCC Director, Deputy CEO, and CFO; (4) Nitaya Yongphithakwatana, TUCC Director and General Administration Department Director; (5) Suttirat Sewee, TUCC Director and Finance and Account Department
Director; (6) BF Intertrade Co., Ltd. (BF); (7) K.S.C Stainless Products Co., Ltd.(KSC);
(8) Jalernrat Chuenwiratsakul, BF & KSC directors; and (9) Thai Niche Co., Ltd. (Thai
Niche).
Earlier, the auditors gave opinions on TUCC Q2/2011 and 2011 financial statements,
respectively, to TUCC audit committee in accordance with section 89/25 of the
Securities and Exchange Act B.E. 2535 (1992) (SEA). The audit committee twice
reported that no wrongdoing was found and that the inadequacies in TUCC’s internal
control, without any sign of fraud.
The SEC probed into the case and found that the aforesaid persons jointly acted to cause
BF and ASC, two related companies where Jalernrat was the director, to issue post-dated
cheques to TUCC and Thai Niche, a subsidiary of TUCC. They created a story that TUCC
and Thai Niche sold black steel to BF and ASC. Then, they acted to cause TUCC and Thai
Niche to proceed for cheques discounting with a financial institution, claiming to use the
money for working capital. When the BF and ASC cheques were nearly due, they made
false entries that TUCC made purchase orders of black steel from eight suppliers totaling
529,529,326 baht to cause the payments from TUCC bank account, claiming to use for the
payments of the said BF and ASC cheques. The SEC findings revealed that some parts of
the money withdrawn from TUCC bank account were used for the benefits of such TUCC
executives.
The actions of Yongyuth, Vacharee, Suchit, Nitaya and Suttirat to jointly proceed for
TUCC to make false records on the purchase of black steel from eight companies and the
sale of black steel to Thai Niche, BF, and KSC, with support from BF, KSC, Jalernrat, and
Thai Niche, were deemed a violation of Section 312 of the SEA. Moreover, their actions
were also considered as syphoning TUCC money for the benefits of themselves and
others, in violation of Sections 307, 308, 311, and 313 of the said Act.
Consequently, Yongyuth, Vacharee, Suchit, Nitaya and Suttirat are deemed as having
untrustworthy characteristics of a publicly held company director and executive on the
grounds that the SEC filed the criminal complaint against them which has caused the
termination of their directorship and executive position at TUCC in accordance with
Sections 89/4 and 89/6 of the SEA, starting from the date of the criminal complaint. On
criminal proceedings, the alleged offenders have the right according to criminal justice
Building Confidence in the Capital Market
procedure to clarify and present information and evidence to the respective authorities. In
any case, the filing of a criminal complaint commences the criminal justice administration;
whereby the court will judge the case accordingly.
For three audit committee members who were reported of the suspicions by the auditors,
they later explained to the SEC that the audit committee’s reports were concluded from
information asked from the accounting units working on the suspicious issuers. They
neither reviewed documents nor examined by any other means despite one of the key
duties of the audit committee is to review financial reports, internal control systems
and suspicious transactions. If the incident in this case was found, the audit committee
should consult the auditor before conducting review in depth. Nonetheless, there was no
indication that the audit committee failed to perform the duties to assist the wrongdoing
of TUCC executives. The SEC, accordingly, issued warning letters to all members of
audit committee to strictly comply with the duties in the future. In this regard, all audit
committee members resigned earlier.
