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TUCC execs and others accused of corporate fraud

Feb 16. 2015
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THE STOCK Exchange Commission (SEC) has filed a complaint with the Department of Special Investigation against six people and three companies for allegedly falsifying documents and accounts and committing fraud that caused unspecified damage to Thai Uniqu
The accused were named as Yongyuth Ngamkaiwan, director and chief executive of TUCC; Vacharee Ngamkriwan, director and deputy chief executive of TUCC; Suchit Rungcharoenchai, ex-director, deputy chief executive and chief financial officer of TUCC; Nitaya Yongphithak-watana, director and director of the general administration department of TUCC; Suttirat Sewee, director and director of the finance and accounting department of TUCC; BF Intertrade Co; KSC Stainless Products Co; Jalernrat Chuenwiratsakul, director of BF and KSC; and Thai Niche Co.
TUCC’s auditors had forwarded the second quarter and full-year 2011 financial statements to its audit committee as per Section 89/25 of the Securities and Exchange Act. 
The audit committee twice reported that no wrongdoing or evidence of fraud was found and that the inadequacies lay in the company’s internal controls. 
The SEC’s probe found that the suspects jointly acted to cause BF Intertrade and KSC Stainless Products, two related companies of which Jalernrat was a director, to issue post-dated cheques to TUCC and Thai Niche, a subsidiary of TUCC. 
They fabricated a story that TUCC and Thai Niche sold black steel to BF and ASC. Then, they acted to cause TUCC and Thai Niche to discount the post-dated cheques 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 showing that TUCC placed purchase orders worth Bt529.5 million for black steel with eight suppliers to prompt the payments from TUCC’s bank account, claiming to use the payments for the BF and ASC cheques. 
The SEC findings revealed that some of the money withdrawn from TUCC’s bank account were used for the benefit of those TUCC executives. 
The actions of Yongyuth, Vacharee, Suchit, Nitaya and Suttirat to jointly push for TUCC to make false records concerning 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 Securities and Exchange Act. 
Their actions were also considered as syphoning off TUCC’s money for the benefit of themselves and others. 
Yongyuth, Vacharee, Suchit, Nitaya and Suttirat were deemed as having untrustworthy characteristics of director and executives. 
Their director and executive positions at TUCC were terminated in accordance with Sections 89/4 and 89/6 of the Securities and Exchange Act, effective as of the date of the criminal complaint. 
Three audit committee members to whom the auditors reported their suspicions explained to the SEC that the panel’s reports were based on information gleaned from the accounting units working on the suspicious issuers. 
They neither reviewed documents nor examined transactions by any other means even though one of the key duties of the audit committee is to review financial reports, internal control systems and suspicious transactions. 
All audit committee members have since resigned.

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