The Stock Exchange of Thailand president Patareeya Benjaphol-chai said yesterday

the bourse would scrutinise securities investments by Live Incorporation, Bliss-Tel and International Engineering (IEC) to determine whether there had been any abnormal transactions.

She said the probe would be undertaken after the SET found that the three companies had arranged cross-shareholdings amongst each other through some connections.

IEC must by tomorrow also provide the SET with further details regarding its expenses without supporting documents for Crystal Agro (CTA), as well as IEC and its subsidiaries' investment in securities of Bt206 million.

IEC holds a 50-per-cent in stake in CTA, while the other half belongs to Suwit Witchawut, who in the past had a close relationship with one of the IEC directors.

There were payments made by IEC to CTA during 2006 totalling Bt83 million. The SET requires IEC to clarify the absence of supporting documents for CTA's expenses shown in CTA's financial statements for the year 2006, including the cost of concessions on an agro-industry project and why the company failed to have CTA's financial statements audited.

The SET would like IEC to specify details of CTA's expenses for the year 2006 totalling Bt54 million, about which IEC has expressed concern.

Also, the auditor failed to review the appropriateness of a US$1-million (Bt34.6 million) cost-of-wood concession that CTA paid during 2006. The SET has asked IEC to disclose the conditions of the concession that CTA was granted by the government of Cambodia as well as the benefits, concession fee and terms of payment.

IEC needs to state the reasons for CTA's $1-million payment for the acquisition of the concession and other details.

In addition, IEC has to explain the objective of granting a short-term loan to CTA, terms of repayment, progress in receiving loan repayments, the interest rate and whether the said loan is in proportion to the shareholding in CTA.

The SET wants IEC to report a summary of the total amount paid to CTA and the benefit received from such spending.

In addition, the SET has asked why IEC made a full payment of Bt60 million to CTA for wood purchases on July 14 last year but no deliveries of wood have been made in the concession area due to the requirement for a report, which is still being prepared, on the environmental effects. IEC needs to clarify whether it has a risk-management plan in case it is not able to prepare the report for the Cambodian government on the environmental impact.

Regarding the investment of IEC and its subsidiaries in Bt206 million in securities, IEC reported a loss of Bt64 million during the first quarter of 2007, consisting of a Bt43-million unrealised loss on investment in securities, which is equivalent to 67 per cent of the total loss.

According to IEC, the investments in securities of IEC Asset and IEC Business Partners were Bt60 million and Bt350 million respectively, making a total of Bt410 million. IEC is required to provide details of the investment decision-making. IEC is also required to advise the criteria for the Bt19.8-million investment it made in the first quarter in Live Incorporation and the benefit the company expected to receive.

The SET wishes to know the reasons for investments in the same securities between IEC and Bliss-Tel, of which IEC has 19.3 per cent of shares, and whether there was a joint decision by IEC's and Bliss-Tel's authorised persons.

In addition, IEC needs to report the business progress of Locus Telecommunication, BNB Intergroup and Dfuze Technology for which IEC reserved Bt336.5 million for impairment loss in 2006.