The Securities and Exchange Commission ("SEC") has issued a Notification setting out actions which will be considered as "acting in concert" beginning 1 August 2009.

Persons deemed to be acting in concert will have their voting rights combined for the purpose of calculating whether or not a mandatory disclosure and/or tender offer is required.

Full Update

The SEC promulgated the Notification, entitled "Capital Market Supervisory Board Re: Prescription of Relationships or Behaviours Qualifying as Acting in Concert and Procedures", on 20 February 2009.

Broadly defined, acting in concert is the intentional cooperation between two or more parties ("concerting parties") to exercise control of a listed company.

The Notification identifies the following relationships or behaviours as red flags of acting in concert:

  1. Agreeing to pool voting rights to achieve a specific purpose;
  2. Agreeing to restrict the sale of securities in a tender offer or having a  standstill agreement;
  3. Soliciting the simultaneous acquisition or disposal of securities by other investors;
  4. Having a mutual source of funds or cooperating to acquire a source of  funds for acquisition of securities;
  5. Cooperating with another person to acquire or dispose of securities in a transaction similar to a previous one involving that same other person;
  6. Permitting another person to continuously vote on one's behalf,  excluding the use of a custodian or a proxy voting service;
  7. Acting as a nominee or jointly holding securities, or appearing to do either of these with a partnership or juristic person in which one is a partner, director or employee;
  8. Giving securities to another person, other than transactions between parents and their children of legal age;
  9. Buying or selling securities at an unreasonably low price, but  excluding transactions between parents and their children of legal age;
  10. Having previously declared oneself to the SEC as belonging to the same group as another.

As soon as the combined shareholding of the concerting parties  increases or decreases to 5% or a multiple thereof, a report of the acquisition or disposal of securities must be made to the SEC and Stock Exchange of Thailand, and once the 25%, 50% or 75% mark is reached, a tender offer must be made.

In considering whether a person has a duty to report an acquisition or disposal of securities to the SEC or launch a tender offer, the securities held by connected persons of the parties acting in concert will also be counted (e.g. a spouse, a minor child, a company in which one of the concerting parties holds more than 30% of all issued shares, etc.).

The concept of acting in concert also works in conjunction with the "chain principle". The chain principle applies when a person gains significant control (i.e. 50% or more of the voting rights) in a holding company of a listed company.


By this Notification, the SEC broadens the scope of persons with duties to report their share acquisition or disposition, and to make a tender offer if a trigger point is reached. The SEC hopes that this increased transparency will benefit minor investors. However, it should be noted that mere cooperation between two or more parties may be considered as acting in concert as a result of the wide coverage of the Notification.

For further information, please contact:
Sathaporn Jumsuk ( )
Gun Vasharakorn ( )

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