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Published on October 4, 2007

The Stock Exchange of Thailand (SET) is investigating possible insider trading in Phatra Insurance shares.

The SET said the company's price had increased significantly and that it was looking to see whether any parties had benefited from information concerning a merger between Phatra and Muang Thai Insurance.

SET senior vice president Supakit Jirapraditkul said it was following suspicious transactions and relationships between them.

"The SET investigated Phatra shares for a while before it was asked to do so by company shareholders. We found irregularities in share price and trading volume before the merger was announced. This makes us suspect someone may have had information. We'll find out who made these transactions," he said.

Phatra and non-listed Muang Thai announced an amalgamation in June. The Lamsam family owns substantial stakes in both companies.

Based on 2006 financial data, the new company will be among the top five insurance companies by premium and seventh by book value.

Three months before the merger was announced, daily turnover in Phatra shares was below Bt1 million, but that rose to Bt5 million after the share price rose from Bt146 to more than Bt200.

Supakit said separately that the SET was ready to investigate STP&I shares after their price rose significantly ahead of an announcement of free-warrant issue to existing shareholders.

STP&I shares gained 48.34 per cent from a close of Bt4.82 on September 9 to Bt7.15 yesterday.

"The SET will investigate share price and trading volume. There has been irregularity in the share price, but we must investigate before making any conclusions," he said.

STP&I yesterday reported that on Tuesday, it approved 83.5 million warrants to be given to existing shareholders at one warrant for every three shares held.

Siriporn Chanjindamanee

 The Nation