On January 7, 2025, shares of RS Group (RS) and its affiliate RSXYZ plummeted due to reports of forced selling linked to the company's largest shareholder, Surachai Chetchotisak, or “Hia Hor.” RS shares closed at their lowest price of 3.76 baht, a 30.09% drop, while RSXYZ shares fell to 1.15 baht, down 25.81%. The market saw heavy selling pressure, particularly in the afternoon, amid revelations of extensive stock pledging both within and outside the market.
Surachai, holding 22.32% of RS shares (487 million shares) and 16.35% of RSXYZ shares (257 million shares), reportedly pledged his shares to raise liquidity, amounting to over 1 billion baht. His actions included off-market transactions, share pledging with brokers, Big Lot offerings, and Block Trades. However, declining share prices triggered forced selling as brokers limited further transactions due to increasing financial risk.
The use of advanced financial instruments, such as Single Stock Futures with high leverage ratios of 5-25x, allowed for temporary liquidity but exacerbated risks when stock prices fell. Brokers began imposing stricter controls, and the inability to cover loan obligations led to cascading forced sales, further dragging down RS and RSXYZ shares.
This financial strain has reportedly been ongoing, with RS and its affiliated companies relying on similar liquidity-seeking methods for some time. However, the downtrend in market conditions and limited buyer interest in Big Lot transactions highlighted the unsustainability of these practices.
The situation raises concerns about RS Group's financial health and its broader impact on investor confidence in small-cap Thai stocks. Analysts have urged regulatory oversight and transparency to address systemic risks posed by excessive stock pledging and speculative trading.