The Securities and Exchange Commission (SEC) has filed charges with the Department of Special Investigation (DSI), accusing Stark Corporation and nine others, including the company's largest shareholder, of financial misconduct.
The move was made as the DSI prepares to issue an arrest warrant against Stark's former chairman Chanin Yensudchai, who is believed to have fled to Hong Kong.
More than 11,000 minority shareholders and bondholders of Stark are also filing complaints with the DSI against eight individuals and entities involving fraud and money laundering at the debt-ridden wire and cable maker.
In a statement on Thursday, the SEC said it filed charges against Stark; Vonnarat Tangkaravakoon, its largest shareholder and acting chief executive; Mr Chanin; and three former executives of the company, comprising former chief financial officer Sathar Chantrasettalead, Chinawat Assavapokee and Kittisak Jitprasertngam.
Four of Stark's subsidiaries are charged, comprising Phelps Dodge International (Thailand), Thai Cable International, Adisorn Songkhla Co and Asia Pacific Drilling Engineering.
The people and companies are accused of joint conduct or agreeing with others to produce false statements for Stark and affiliates during 2021 and 2022 to deceive other people.
In addition, they are accused of concealing details about the company's accounts and debenture sales, including a planned investment in German firm Leoni AG.
These actions were done to obtain assets from the deceived individuals, the SEC said in the statement.
The regulator also filed charges with the Anti-Money Laundering Office against the 10 accused parties regarding violations of the Securities and Exchange Act, said the statement.
Stark informed the Stock Exchange of Thailand (SET) on Thursday that Mr Vonnarat resigned from the position of acting chief executive, director, and all relevant positions at the company effective July 6. Mr Chanin, Mr Chinawat, Mr Sathar and Mr Kittisak already resigned from all company positions in April this year.
Apichart Tangeakchit was named the company's acting chief executive until a new chief executive can be appointed.
In a related development, DSI deputy director Pol Maj Yuthana Praedam, who heads the probe of Stark, said an arrest warrant would be issued for Mr Chanin, who is believed to have fled Thailand for Hong Kong.
Mr Chanin missed an earlier appointment with the DSI to give testimony in a case of alleged fraud involving Stark.
Mr Sathar, another suspect in the case, is scheduled to provide testimony with the DSI later this month, said Pol Maj Yuthana on a TV programme yesterday.
"The investigation is more than 80% complete after the DSI received information from relevant agencies, including the SEC, which has passed information about Mr Sathar's alleged involvement in the fraud to our office," he said.
Pol Maj Yuthana said Mr Sathar told the DSI that Mr Vonnarat was also involved in irregularities at Stark.
Nuttawut Rungwong, board chairman of Investment Advisory Securities Ton Than Corporation Co, on Thursday accompanied minority shareholders and bondholders of Stark to the DSI to file charges against the company and seven other individuals and entities for their involvement in fraud and money laundering. Those accused include Mr Vonnarat, Mr Chanin, Mr Sathar, Mr Chinawat, and Asia Pacific Drilling Engineering.
"Damages from the Stark case could reach 135-150 billion baht, including the loss of 75 billion of the company's market capitalisation, which has been reduced to only 200 million baht," said Mr Nuttawut, who acts as an advisor for Stark shareholders and bondholders.
"This capitalisation could be reduced to zero if the company enters into business rehabilitation under the bankruptcy court, severely hurting minority shareholders."
According to some bondholders, they were convinced by banks' marketing staff to buy Stark bonds via an online channel, though they are not high net worth investors, which were the target customers for Stark's corporate bonds.
