The Stock Exchange of Thailand (SET) has changed its listed companies’ regulations to match regional standards; it will benefit both listed companies and their shareholders. The changes are on the approach for listed companies facing possible delisting due to operations and financial conditions to resolve within a maximum of 4 years period.
SET President Charamporn Jotikasthira said that listed companies facing possible delisting due to operations and financial conditions, will now be given three years to recover, with the possibility of an extension of no more than one year. Previously, such companies were not given a specific deadline.
From this January 26, 2011 onwards, any company that faces delisting will be moved to in Phase I of the NC (Non-Compliance) group. The names of such firms will be announced through the SET’s information system, SETSMART and www.set.or.th, so investors can be aware of the companies’ status. The SET will then suspend trading in the company’s securities through having an “SP”, or Suspension, sign posted against them. The company must plan to complete its rehabilitation within three years.
From March 10, 2011 onwards, firms which are currently in the NC (Non-Compliance) and the NPG (Non-Performing) Groups, will be moved to the NC-Phase I or the NPG-Phase I Group, as the case may be, and given three years for rehabilitation.
During these three years, the company in rehabilitation may ask the SET to extend the rehabilitation period once, for no more than one year.
“SET’s change in approach is comparable with practice in regional stock markets, such as Hong Kong, Singapore and Malaysia, where a specific timeframe is given to companies facing possible delisting due to operations and financial condition to improve their performance. This deadline is to encourage firms to speedily solve their problems and allow their shares to continue to be traded, which will benefit their shareholders and help uphold the standard of SET-listed stocks”, said Mr. Charamporn.
The SET will keep investors informed about the progress of companies undergoing rehabilitation. When such firms are able to resolve their operations and financial status, the SET will allow trading of its securities.
Delisting criteria due to operations and financial condition are (a) a suspicious drop in operating assets, (b) a complete or almost halt in operation, (c) if its auditor issues a disclaimer or an adverse opinion on the financial statements of the company for three consecutive years, (d) if the shareholders’ equity in the firm’s latest audited financial statements is negative.