Investors question whether some firms ready to relist

By Nuntawun Polkuamdee

With shares in one firm tanking, investors are calling on securities regulators to investigate the performance of several listed companies that recently emerged from business rehabilitation.

The call came after shares of Tongkah Harbour fell sharply in recent weeks after the company reported poor first-quarter results. The company, which was previously suspended from trading during its rehabilitation, was allowed to resume trading on May 4 after successfully posting three straight quarters of net profit.

But in the first quarter the mining company posted a net loss of 29.53 million baht, compared with losses of 23.3 million during the same quarter last year. This comes after the company reported profits of 50.88 million baht in the fourth quarter of last year and 16.42 million for the third quarter.

Shares of Tongkah Harbour closed yesterday at 2.50 baht, up eight satang, in trade worth 219.8 million baht. This compares with a closing price of 3.80 baht per share on May 4, the first day of trade after its suspension was lifted.

The poor results have raised questions about the SET's procedures for allowing suspended companies to resume trading. Another company, Power-P, had its shares suspended by the SET in April after its auditors offered an adverse opinion on the company's accounts. The Securities and Exchange Commission has now accused the firm's executives of accounting fraud.

Sakkarin Ruamrangsri, a SET senior vice-president, said the exchange asked THL to clarify its first-quarter losses after retail investors raised complaints.

The SET could only ask the company to clarify its performance and disclose additional information to investors, he said.

As far as the company's accounts and accounting practices are concerned, the responsibility rests with the firm's independent auditors and the SEC, Mr Sakkarin added.

"But we are concerned to see companies in the non-performing group that meet the criteria to resume trade and then show problems with their accounting standards or financial position," he said.

The SET has no plans to transfer THL back to the non-performing group for now, but could do so if the company's shareholder equity turns negative.

Investors are also monitoring other non-performing companies in the pipeline to resume trade, including resources firm MDX and Abico Holdings.

Mr Sakkarin said companies with negative shareholder equity and ongoing net losses would first be assigned NC (non-compliance) and SP (suspended) signs.

If their problems could not be solved within two years, they would be transferred to the non-performing group.

Seven firms currently have NC (non-compliance) and SP (suspended) signs attached: Abico, Daidomon, iTV, Pompui, Safari, Sino-Thai Resources and MDX.