Mr. Korsak Chairasmisak, Vice Chairman of CP Axtra Pcl. and CP All Pcl. has sold 877,100 shares in CP All at an average price of THB62.88 per share on December 3, 2024, which was anticipated to be a normal transaction via Thai Stock Exchange, according to the filing to SEC.
It has been observed that Mr. Korsak sold a significant portion of CP All Public Company Limited (SET: CPALL) shares just five trading days before CP Axtra Public Company Limited (SET: CPAXT) reported to the Stock Exchange of Thailand (SET) on December 13, 2024, about establishing Axtra Growth Plus Co., Ltd. CPAXT plans to invest in The Happitat, a mixed-use real estate project, in which CPAXT holds a 95% stake, with an investment of 7.97 billion baht to purchase newly issued shares in cash, while Magnolia Quality Development Corporation Limited (MQDC) holds the remaining 5%.
On December 3, Mr. Korsak, a vice-chairman of both CPALL and CPAXT, sold CPALL shares, while CPAXT issued information potentially affecting its share price on December 13. Interestingly, CPAXT’s disclosure lacked details on when its board made or approved related decisions. CPALL is the largest shareholder of CPAXT, holding 3.64 billion shares or 34.91% of the total. Therefore, CPAXT’s performance directly affects CPALL’s stocks.
Following the announcement, CPAXT’s stock price dropped sharply on the next trading day (December 16, 2024), opening at 29.75 baht, a 6.50 baht decrease from December 13. The drop represented a 14% decline with a narrow peak at 30 baht, while hitting a low of 28 baht before closing at 28.25 baht, down 18.71% with a trading value of 3.64 billion baht.
Observers raised concerns but couldn’t conclude whether Mr. Korsak, as vice-chairman, knew of the investment plans when selling his shares earlier. There’s no report on when CPAXT’s board approved the investment or the number and dates of past meetings to consider this decision. The company did not disclose such information to the Thai Stock Exchange either. However, the CPAXT and CPALL both disclosed information through the Stock Exchange of Thailand on December 16, 2024, stating that their board and audit committee had been carefully considered and approved the move.
In this regard, this transaction is not considered a connected transaction. In addition, the highest transaction size is 1.49% when calculating the transaction size based on the Company’s subscription and cash payment for 95% of new shares in AGP in an amount of approximately THB 7,970 million, and will be less than 15% when calculating the transaction size based on such subscription of shares in AGP in cash together with further investment which is expected to be made by the Company in order to complete the development of The Happitat Project. Therefore, this transaction is not regarded as an acquisition or disposal of assets which is significant under the Notification of the Capital Market Supervisory Board.
Despite reasons for the investment plan, analysts and investors perceive it negatively, impacting the company’s future performance and corporate governance ratings. Subsequently, CPAXT experienced massive sell-offs. Investors who sold CPALL shares earlier minimized their risk from the substantial stock price decrease.
In the past, on December 13, 2015, Mr. Korsak faced allegations from the Securities and Exchange Commission (SEC) for insider trading in MAKRO (later changed to CPAXT) shares, leading to fines for involved parties.
The SEC found that Mr. Korsak and others purchased MAKRO shares with non-public information significantly impacting the stock price during CPALL’s deal negotiations to acquire MAKRO shares held by SHV Netherlands B.V., necessitating a Tender Offer at a notably higher price than current market levels.
The implicated individuals, including Mr. Korsak, utilized inside information, some from participating in executive meetings with the sellers, while others used information known from their positions as CPALL executives and directors. They bought MAKRO shares under their own or affiliated accounts.
Their actions breached Section 241 of the Securities and Exchange Act B.E. 2535 and received fines. Despite previous allegations, Mr. Korsak continues to serve as a board member but no longer as a company executive.
