Thailand’s market regulator ordered the seizure of assets of scandal-hit Stark Corp., its largest shareholder and some former executives allegedly involved in falsifying accounts that’s led to a bond default and crash in its share price.
(Bloomberg) — Thailand’s market regulator ordered the seizure of assets of scandal-hit Stark Corp., its largest shareholder and some former executives allegedly involved in falsifying accounts that’s led to a bond default and crash in its share price.
The Securities and Exchange Commission said it will freeze the assets of Vonnarat Tangkaravakoon, four former employees, Stark and four other related entities for 180 days. The regulator will also seek a court injunction to prevent the accused from leaving the country in the next 15 days, the SEC said in a statement.
Earlier on Thursday, the regulator said it had filed charges of financial misconduct against the 10 accused with the Department of Special Investigation for further probe and legal action.
The crackdown comes after the industrial cable maker faced a criminal investigation and a class-action lawsuit following revelations of irregularities in past accounting. Restated financial results showed it incurred a net loss in the past two years, and that its liabilities exceeded assets. The company last month defaulted on some of its 39 billion baht ($1.11 billion) in liabilities. The shares were suspended after sinking 99% this year.
Those involved, including former chairman Chanin Yensudchai and former chief financial officer Sathar Chantrasettalead, concealed details and made false statements about the company’s accounts. The regulator also found the company had diverted money raised from a bond sale for a planned investment in German firm Leoni AG, according to the regulator.
“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 Co. “Investors’ confidence will return when there are clear rules to prevent companies from committing accounting irregularities like this again.”
The order for freezing of assets is issued as “there are reasonable circumstances to believe that the individuals will flee the Kingdom,” the commission said.
Other Scandals
The watchdog’s steps against Stark follows other corporate scandals since late 2022. In September, crypto exchange operator Zipmex Thailand was accused of skirting the country’s digital assets rules. Two months later, authorities froze the assets of More Return Pcl investors because of possible fraud, according to local media reports.
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 firm first delayed releasing financial statements. The company last week said it’s planning to restructure its debt to stave off a forced delisting, adding it may ask creditors to swap their debt into equity and try to convince its major creditors not to pursue an accelerated debt payment.
Vonnarat resigned from all his positions at Stark, including as acting chief executive and director of the Nomination and Remuneration Committee, the company said in an exchange filing Thursday. Four others indicted by SEC had quit the company in April, it said. Apichart Tangeakchit was named as acting CEO until a permanent replacement is found, it said.
Shares of TOA Paint Thailand Pcl, in which Vonnarat held a 9% stake as of last August, have sunk more than 20% since the end of May. TOA declined to comment.
Before becoming one of the biggest financial worries in Southeast Asia’s second-largest economy, Stark looked like a Thai corporate success story. Backed by a wealthy businessman, only a year ago the then nearly $2 billion 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, the Thai firm cited Russia’s war in Ukraine for pulling out of the deal.
–With assistance from Pathom Sangwongwanich.
(Recasts with freezing of assets.)
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