The Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) will hold a formal discussion this week to seek additional measures to tackle the problems of listed company executives who fail to comply with the fiduciary duty principle and major shareholder quarrels.

SET senior executive vice-president Santi Kiranand admitted that the SET has run out of tools to deal with listed companies who do not perform their fiduciary duties, and needs to discuss tightening existing measures with the SEC.

The planned discussion between the SET and the SEC is aimed at protecting retail investors from damages that could result from conflicts among listed companies' major shareholders and executive mismanagement.

The SET's existing instruments are sufficient for normal circumstances but are not enough to handle executives who commit gross negligence.

"The SET's tools can only force listed companies to disclose information, while the SEC can impose penalties against executives and auditors. The Securities and Exchange Act stipulates that listed companies' executives who fail to uphold their fiduciary duty are in breach of the law and could be subject to criminal penalty," he said.

He said the SET and the SEC have held informal discussions on the issue.

"When irregular incidents such as major shareholder conflicts occur and boards of directors fail to protect shareholders, stakeholders must take action. The SET has called for listed companies to disclose information within a deadline. If their information disclosure remains unclear, the SET will ask for further information until investors can see a clearer picture," said Mr Santi.

If listed companies fail to disclose required information, their share trading must be suspended to prevent damages from snowballing and thwart those who have more information from taking advantage of others, he said, adding that the suspension (SP) sign was aimed at allowing all investors to have equal information.

Finance Minister Apisak Tantivorawong recently said that a plan to empower the SEC to sack listed-company directors who cause damage and fail to comply with their fiduciary duties has been derailed by opposition voiced at a public hearing.

The ministry recently amended the law to enable the SEC to oust directors and pave the way for new board members if the agency found that problems at companies were causing serious damage.

Several listed firms are undergoing conflicts among major shareholders over control of board seats and management. In some cases, the disputes have disrupted business operations and debt repayments.

Association of Securities Companies chairwoman Pattera Dilokrungthirapop said that the association plans to discuss with the SET measures to help retail investors who are affected from trading suspensions of shares including Energy Earth Plc (EARTH), Polaris Capital Plc (POLAR) and Inter Far East Energy Corporation Plc (IFEC).