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SET-listed Thonburi Healthcare Group (THG) has denied involvement in the alleged multi-billion-baht fraud involving its founder and former chairman Boon Vanasin, his wife and a daughter, saying the case does not affect its business or operations.
In a filing to the Stock Exchange of Thailand (SET) on Monday, THG’s secretary Nattakan Jittinapat said Dr Boon resigned from his position as director and chairman of the company in August 2022 and currently holds no position or role in the firm’s management.
The statement followed news reports that the court issued arrest warrants against Dr Boon on charges of fraud and money laundering, as well as against his spouse Charuvarn Vanasin and their daughter Nalin.
The hospital tycoon, who allegedly lured some 7.5 billion baht of investments in fake medical projects, has fled to China. Both Mrs Charuvarn and Ms Nalin, who currently serve as directors of the company, have voluntarily surrendered themselves to the police and denied the allegations by stating that the signatures on documents related to the allegations had been forged.
“THG’s operations remain unaffected and continue as normal without any impact on the company’s business or activities,” said Ms Nattakan.
Currently, THG operates seven leading hospitals in Thailand and two overseas. According to the company’s website, the group has 1,100 registered beds and a combined capacity to service 9,700 outpatients daily, making the group one of the leading healthcare providers in Thailand.
“The company has not received any explanation from the two directors regarding the allegations reported in the media, nor have they expressed any intention to resign from their positions as directors of the company,” she said.
Based on the current facts and legal principles, the criminal charges against them do not disqualify them from serving as directors of the company, as the legal proceedings are ongoing and no final judgement has been rendered.
“Nonetheless, the board recognises the importance of this matter and is closely monitoring developments to assess any potential impact on the company’s reputation. The board may consider presenting this matter to the shareholders’ meeting to deliberate on the qualifications and appropriateness of the two directors to continue serving in their roles.”
Shares of Thonburi surged as much as 21% in Bangkok on Monday, the biggest intraday advance since they began trading in 2017.
Dr Boon, now 86, was fined by the Securities and Exchange Commission (SEC) when he was THG chairman in 2022 for misleading investors by disseminating false information. He was barred from serving as a director or executive in a public company for 42 months.
While THG continues to operate with transparency and adhere to principles of good corporate governance, “the company advises all investors to exercise caution when receiving information not officially issued by the company and verify the source of such information before making any investment decisions,” Ms Nattakan noted.
THG also denied the previous reports suggesting Dr Boon invested personal funds in the Jin Wellbeing County project in partnership with the company.
“The investment in the Jin Wellbeing County project was solely undertaken by Thonburi Wellbeing Co Ltd, a subsidiary wholly owned by the company since the project’s inception,” said the statement.
The investment in this project was approved by an extraordinary general meeting of shareholders in 2016, and the company has consistently reported its progress at annual shareholders’ meetings and in its annual reports.
Regarding reports of Dr Boon inviting investors to participate in five medical projects, THG clarified that all such investment solicitations were conducted solely by Dr Boon and the company is “not involved at all”.
The projects are a cancer centre in Pinklao, a wellness centre in Rama III, three hospitals in Laos, joint ventures with a hospital in Vietnam, and the establishment of a medical intelligence centre.
THG initially got involved in signing a memorandum of understanding (MoU) for a joint venture project to establish a cancer centre, a post-surgery rehabilitation centre, a comprehensive elderly care centre, and a holistic health centre in the Pinklao area, along with a feasibility study for an investment in a hospital in Ho Chi Minh City, Vietnam.
“These two projects were only at a preliminary study stage and the signing of an MoU. The company has thoroughly evaluated the feasibility plans for both projects and decided not to proceed with investments in either of them,” the statement noted.
Subsequent announcements about these projects were made by Dr Boon without the company’s knowledge or involvement, it added.
The SEC said on Monday that it has been closely monitoring Dr Boon’s alleged fraud and initially found Dr Boon acted on his own and was not involved with THG.
“Therefore, it may be considered a fraud under the Criminal Code, which does not yet fall under the Securities and Exchange Act BE 2535 [the Securities Act], which focuses on fraud in companies offering securities to the public,” the regulator said in a statement.
“If any actions that may fall under the Securities Act are found, the SEC will expedite the process and coordinate with the investigators.”
The SEC has investigated the actions that may be considered as an offence under the Securities Act. For example, THG disclosed information to the SET on Sept 20 regarding the discovery of suspicious transactions by a subsidiary of THG in making loans to companies related to the Vanasin family, including ordering products from a company registered in Singapore. But the actual goods were not delivered.
Stock market analysts advised investors to be extra cautious when investing in THG given the ongoing uncertainties. Daol Securities (Thailand) recommends avoiding investments in THG, while Tisco Securities recommends selling THG given a negative profit due to a large amount of provisions.
The business restructuring has not yet materialised, resulting in weak revenue for many business units. It will still take a long time for revenue to recover because the business restructuring has not been fully implemented.
“In addition, there are still cases related to the company’s directors that still need time in order to consider the case,” Tisco said.