The Securities and Exchange Commission (SEC) has filed charges against the largest shareholder and others involved in the management of Stark Corporation Plc, the industrial cable maker at the centre of an accounting scandal and debt default.
The SEC filed charges of financial misconduct against 10 entities and individuals, including largest shareholder Vonnarat Tangkaravakoon, with the Department of Special Investigation (DSI), according to a statement from the regulator.
The charges come after Stark faced a criminal investigation and a class-action lawsuit following its revelations of accounting irregularities. Restated financial results showed it incurred a net loss in the past two years, and that its liabilities exceeded its assets.
The company last month defaulted on some of its 39 billion baht in liabilities. The shares were suspended from trading on the Stock Exchange of Thailand after sinking 99% this year.
Those involved, including former chairman Chanin Yensudchai and former chief financial officer Sattha Chansetthalert, concealed details and made false statements about the company’s accounts, and hid information on debenture sales and a planned investment in the German firm Leoni AG, according to the SEC.
Stark has yet to acknowledge the charges, said an official contacted by phone who declined to be identified citing company policy.
“The SEC’s action is a good step, but better regulations would help restore investors’ trust,” said Jitipol Puksamatanan, head of macro and wealth research at CGS-CIMB Securities Thailand. “Investors’ confidence will return when there are clear rules to prevent companies from committing accounting irregularities like this again.”
The watchdog’s steps against Stark follow other corporate scandals since late 2022. In September, the crypto exchange operator Zipmex Thailand was accused of skirting the country’s digital asset rules. Two months later, authorities froze the assets of More Return Plc investors because of possible fraud.
Mr Vonnarat, the largest shareholder and a scion of one of Thailand’s wealthiest families, had been tasked with keeping Stark afloat after the departure of key executives earlier this year, when the company first delayed releasing financial statements.
Stark said last week that it was planning to restructure its debt to stave off a forced delisting, adding that it may ask creditors to swap their debt into equity and try to convince its major creditors not to pursue an accelerated debt payment.
Shares of TOA Paint Thailand Plc, in which Mr Vonnarat held a 9% stake as of last August, have also sunk more than 20% since the end of May. TOA declined to comment.
Not that long ago, Stark looked like a Thai corporate success story. Backed by a wealthy businessman and worth nearly $2 billion company as recently as a year ago, the company was making its first push out of Asia with plans to buy an automotive cable unit of Germany’s Leoni for €560 million. Last month, however, Stark cited the impact of the war in Ukraine for pulling out of the deal.
