GMO-Z com Securities to discontinue operations in Thailand due to financial struggles, including unfair trading and ongoing deficits.
GMO-Z com Securities to discontinue operations in Thailand due to financial struggles, including unfair trading and ongoing deficits.
GMO Financial Holdings, Inc. has announced that its Thai subsidiary, GMO-Z com Securities (Thailand) Public Company Limited, will discontinue all of its operations following a resolution passed at the company’s Board of Directors meeting on January 27, 2025.
The decision to dissolve and liquidate the subsidiary is set to follow the cessation of its business activities. GMO-Z com Securities (Thailand) was established in November 2017, but its operations have faced significant challenges in recent years. A key issue arose in November 2022 when the company was involved in an unfair trading incident linked to substitute securities used as collateral for margin trading.
This issue stemmed from an overconcentration of lending to a few large clients and using specific stocks as collateral, leading to ample provision for doubtful accounts. The subsidiary implemented a series of reforms to improve its risk management in response to these difficulties. These included halting new loan approvals and tightening loss-cut standards. Despite these efforts, the company struggled with mounting deficits, primarily due to ongoing declines in stock prices.
These challenges persisted through the fiscal year ending December 2022 and beyond. In December 2024, the company suspended its margin trading service, a core aspect of its business. Following this, GMO-Z com Securities (Thailand) considered maintaining its cash equity trading services and exploring new business opportunities. However, after a thorough assessment, it was concluded that returning to profitability would be unlikely.
Consequently, the decision was made to discontinue all business operations. The closure of the Thai subsidiary marks the end of GMO Financial Holdings’ attempt to establish a foothold in Thailand’s securities market, signaling the company’s shift in strategy as it moves away from this venture.
In Conclusion, the closure of GMO-Z com Securities in Thailand reflects the challenges faced by the subsidiary in recent years. Despite efforts to improve risk management and profitability, the company struggled with ongoing financial setbacks. GMO Financial Holdings will focus on other business opportunities and strategic directions.
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