Shareholders push for SEC probe of THAI head's firing
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Thai Airways International shareholders have taken their dissatisfaction with the company's board of directors to the Securities and Exchange Commission, demanding that it investigate within 30 days whether the directors complied with securities laws.
Led by Monchai Rabruentha-weesuk, about 15 small shareholders yesterday requested an SEC investigation into two issues, information disclosure and the scope of responsibility of the board of directors after the recent dismissal of Piyasvasti Amranand as president of the airline. They vowed to return if the SEC could not pinpoint whether the directors violated the laws within the 30-day time frame or if the watchdog’s answer is not clear enough. “Should we not get any answer or get an unclear answer, we’ll return,” Monchai said.
He said the shareholders’ action was not aimed at reinstating Piyasvasti as president; it seemed too late for that. “We just want to give them [THAI directors] a lesson that in their capacity, they should give priority to the benefits of the company and the nation, not just to get free tickets or meeting allowances. It remains uncertain if there was any order for the dismissal.”
The SEC’s Thawatchai Pittayasopon said the watchdog needed to see what could be done, as under the Securities and Exchange Act, the commission is not empowered to investigate all aspects of listed companies and has never before launched an investigation into the actions of a board of directors.
Lack of clarity
While assuring the shareholders that the SEC would strictly follow the law and launch an investigation as soon as possible, he said it remained to be seen how long the probe would take. The first thing to be done is to see what the SEC can do under Article 89/7 of the law, which requires directors to honour the specified duty and scope of their responsibility or face criminal and civil legal action.
The shareholders said THAI might have violated Article 56 of the Securities and Exchange Act, through lack of clarity over the premature termination of Piyasvasti’s employment contract. They claimed that the information available now was insufficient for shareholders.
On the board of directors’ responsibility, the shareholders believe that the board fell short of the requirements of Article 89/7, as the dismissal caused damage to the company and shareholders. Backing up this is the fact that THAI’s share price fell from Bt23.10 on May 18 to Bt20.20 on May 23, as Piyasvasti was widely commended for his role in turning around the national carrier. The board announced the contract’s termination on May 21.
They were also concerned over THAI’s cost-cutting measures, which partially contributed to the first-quarter net profit, as employees have sought a revision since Piyasvasti left office. Last, they also expressed concern over UK-based consultancy Skytrax’ postponement of an upgrade of THAI’s status in the global airline industry after Piyasvasti’s dismissal.
“THAI as a listed company and a state enterprise should demonstrate responsibility to society and shareholders,” Monchai said. “The management should not be under political influence, as this runs against the principles of good corporate governance and affects the company’s image.”
The shareholders also urged the SEC to demand testimony or documents that support Piyasvasti’s dismissal, and disclose the information to shareholders and the general public.
Piyasvasti earlier filed a lawsuit against the company at the Central Labour Court, asking for additional compensation or reinstatement. His contract was terminated on June 21, a year before his term would naturally expire in July 2013. In his goodbye note to THAI employees, he also urged shareholders to seek clarification over his dismissal.
