In September 2025, Thailand’s Securities and Exchange Commission (SEC) accused a company listed on the Stock Exchange of Thailand (SET), including its current and former directors, of concealing material information in connection with its filing registration and draft prospectus. This recent enforcement action demonstrates the serious consequences of making false statements or appearing to conceal material information in IPO filings and ongoing disclosures. In addition to being subject to criminal penalties, such actions can impact the eligibility of directors and executives to serve and may cause lasting reputational damage.

Key Legal Risks

The Securities and Exchange Act B.E. 2535 (1992) (as amended) imposes strict liability for making false statements or concealing material information in IPO registration statements and draft prospectuses. In such cases, criminal penalties, including imprisonment for up to five years and substantial fines, may apply to the company, its directors, and responsible officers. However, misstatements or omissions in IPO filings do not, by themselves, disqualify directors or executives from holding office, whether arising from an SEC accusation or even a final court judgment.

In contrast, for ongoing disclosures after listing, such as financial statements, annual reports, and meeting notices, false or misleading statements or concealment of material information can result in not only criminal liability but also immediate disqualification of directors and executives. If the SEC accuses a listed company or its directors or executives of such misstatements or omissions, those directors or executives are immediately disqualified from their positions, even before a final court judgment.

Director and Executive Qualifications

Directors and executives must meet the SEC’s specified standards of trustworthiness, as set out in the relevant rules. The SEC clearly defines characteristics that are considered to demonstrate a lack of trustworthiness. For ongoing disclosures, being involved in making false statements or concealing material information can immediately call into question their suitability to serve, and may hold other consequences, as noted above. However, grounds for disqualification do not extend to misstatements or omissions in IPO filings, regardless of final court judgment. Companies should be aware of these important distinctions and not assume that all disclosure violations are treated the same under the law.

Materiality Assessment

Information should be considered material if a reasonable investor would regard it as important, especially if it could influence the price or value of securities. Companies should carefully assess both the likelihood and potential impact of events, avoid selective disclosure, and seek expert advice when necessary to ensure a thorough and diligent process.

Ensuring Compliance

Accurate disclosure and strong governance are essential at every stage. Failure to disclose material information or making false statements can result in criminal liability, regulatory sanctions, and disqualification of directors. Proactive controls and transparent communication help reduce risk and support market integrity.

Boards, executives, and advisors should ensure that all disclosures are accurate, complete, and timely. Robust internal controls and clear documentation are essential to support compliance. Companies should also prepare contingency plans for leadership changes in the event of regulatory action, and maintain transparent communication with investors and stakeholders regarding regulatory matters and the company’s responses.