Despite no breaches of securities rules, pressure is mounting on construction tycoon Premchai Karnasuta as a potential downgrade in corporate governance (CG) score looms over Italian-Thai Development Plc (ITD) after his arrest on suspicion of illegal hunting.
The Thai Institute of Directors (IOD) will take the issue into account when compiling its CG report this year, with the Anti-Corruption Organisation (ACT) saying top executives should set a good example as stated in the company's code of conduct.
Although the case is deemed a personal issue, this may affect the company's CG rating because CG takes the impact on all stakeholders into account, as well as environmental impact, said IOD president and chief executive Bandid Nijathaworn.
As Mr Premchai is the president of a SET-listed company, the case should be clarified among the company's board of directors and the board will have to come to a conclusion based on corporate ethics and codes of conduct, Mr Bandid said.
Mr Premchai will be tried according to the judicial system for the poaching allegations, he said.
Mr Premchai, 63, was arrested in the Thungyai Naresuan Wildlife Sanctuary on Sunday night along with three others.
They were found with the carcasses of protected wild animals, including a 1.48-metre-long Indochinese leopard, a Kalij pheasant and a common muntjac, also known as a barking deer, as well as three long-barrelled guns and ammunition.
The four have been granted bail with a bond of 150,000 baht each. They deny the charges.
ITD shares plunged to 3.66 baht a share on Thursday, down from 3.84 baht on Monday amidst the controversy surrounding Mr Premchai.
Top government and capital market officials recently remarked on the controversy.
Deputy Prime Minister Wissanu Krea-ngam said any personal wrongdoings must be separated from company affairs and the matter should be left to authorities to investigate.
Deputy Prime Minister Somkid Jatusripitak said the case will not affect state construction projects that ITD has been contracted to undertake.
SET president Kesara Manchusree said that while the Securities and Exchange Act does not cover offences relating to Mr Premchai's case, questions about moral integrity and appropriate behaviour remain.
Mana Nimitmongkol, secretary-general of the ACT, said the company, especially top executives, should act in accordance with its own CG code of conduct.
"Issuing a written code of conduct, but failing to comply, equates to negligence," Mr Mana said. "Writing such a code is irresponsible because it misleads investors as to the company's principles."
Mr Mana said the company's board of directors must consider the options available to them for taking action on the issue and investors should be concerned about the code of conduct in companies they have invested in.
Voravan Tarapoom, chairwoman of the Federation of Thai Capital Market Organisations, said the public sector should emphasise the importance of the environment and the company's board of directors should consider whether an executive poses a risk to the company's reputation and, by extension, business operations.
In a separate development, the Securities and Exchange Commission (SEC) is set to forward the public hearing result for an initial coin offering (ICO) regulatory framework to the Capital Market Supervisory Board and the SEC Board.
It is expected that the regulatory framework will be finalised by March, said SEC secretary-general Rapee Sucharitakul.
The SEC is also mulling regulations to form the framework for cryptocurrencies, which will be forwarded to a joint working panel of the Finance Ministry, the Bank of Thailand, the SEC and the Anti-Money Laundering Office in a month's time, Mr Rapee said.
Despite being classified as separate from cryptocurrencies, ICO is a crowdfunding method using issuance of digital tokens in exchange for investors' cryptocurrencies, therefore a compatibility regulatory framework is needed to supervise ICO and cryptocurrencies, he said.