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SET Board Gives An Approval For A Budget Of 36 Million Baht To Promote Good Corporate Governance In Listed Companies, Reduce Investment Units' Trading Fees, Plus Removal Of The Distribution Of Small Shareholdings Requirement For REHABCO Companies, And An

Date 24/07/2002

The President of the Stock Exchange of Thailand (SET), Mr. Kittiratt Na-Ranong, in disclosing the resolutions of the meeting of the SET Board of Governors, said today (24 July 2002) that the meeting gave its support to a project undertaken by Thai Rating and Information Services Co., Ltd. (TRIS) to promote good corporate governance, by reducing the fees to listed companies with good corporate governance rankings by another six million baht worth in additional to 30 million baht budget previously set aside. Listed companies with good rankings will be entitled to have a 50% discount on their annual fees for two consecutive years. Total budget for this fee reduction is now totals 36 million baht.

"This additional budget will help lessen the burden on listed companies participating in the Good Corporate Governance Rating program. The SET will offer support in the form of an annual fee reduction that, in nominal terms, is no less than an amount that the companies are required to pay to participate in TRIS's Rating Program. It is felt that listed companies will thus be encouraged to take part in this program, applications for which close on December 31, 2003," Mr. Kittiratt explained.

"Moreover, the Board Meeting also approved an adjustment in the listing requirements for basic public utilities businesses by removing the financial condition that these businesses must have already operated on a commercial basis, since these businesses are important to the development of the country, are capital-intensive - especially in the first stage of building the infrastructure - and already have had their feasibility approved by institutional investors and financial institutions. Thus, the projects' income stream and stability can be assured to a certain extent. Approval from the SET Board will encourage these companies as well as state enterprises to list on the Exchange and to become investment products for investors," Mr. Kittiratt said.

Furthermore, major shareholders or executives who collectively hold 35% of the shares who were previously prohibited from selling their shares for three-year (Silent Period) and after that the shareholders can reduce their shareholding by 20% every six months will be prohibited from selling their shares until the businesses are able to have income from their commercial operations for a one-year period. After that they are allowed to sell 20% of their shares every six month.

This is intended to prohibit executives or shareholders of the companies from selling their shares before the companies achieve commercial operation. However, the silent period will be depended on when there will be income from sales and services.

On the same day, the Board also gave approval for the reduction in the minimum trading fees for investment units of equity funds investing in either local or foreign markets, as well as the warrants for buying these investment units. Trading fees will be reduced from a minimum of 0.25% and 0.20% for Internet trading to fully negotiable rates with a minimum charge of 0.1% of trading value.

"The reduction in the trading fees for investment units will reduce the costs of investors and encourage more investment through the investment funds, which will be fruitful for the expansion of the investor base in the longer term."

The SET President went on to say that: "The SET Board of Governors also removed a requirement on the retail shareholder distribution for companies under rehabilitation (in the REHABCO Sector) that will resume trading. Previously they were required to have a free float proportion of no less than 15%, but now they will be no longer required to do so. If the companies have less than a 15% free float, they will have to adjust the proportion within one year, as for other listed companies.

"Since most of the REHABCO companies underwent debt restructuring by securitization or entering new ventures, the free float proportion of these companies was effectively less than 15%, so they were unable to begin trading again, plus the low free float portion also affected their rehabilitation plans as well. The removal of such a requirement will help accelerate the time before these companies can re-start their trading which will be good to both the companies themselves and their shareholders," Mr. Kittiratt said.

The SET will propose this adjustment in the listing requirements for basic public utilities companies, and a reduction in the trading fee of the investment units to the SEC Board for approval.

Meanwhile the SET Board has appointed Mr. Suvit Mapaisansin (a member of the SET Board appointed by SET member companies) and Mrs. Wiwan Tharahirunchote (a member of the SET Board appointed by the SEC) to the Board of Directors of the Thailand Securities Depository Co., Ltd. (TSD) in place of Mr. Penwan Thongdeetae and Mr. Chokechai Tanpoonsinthana whose terms had expired. They will hold office from July 12, 2002 to October 31, 2002.

Mr. Songdej Praditsmanont and Mrs. Wiwan Tharahirunchote are also appointed to become members of the SET's Audit Committee in the place of Mr. Penwan Thongdeetae and Mr. Machima Kunjara Na Ayudhya, whose terms had expired. Their terms in office will be effective from July 24, 2002 onwards.