Two former executives of financially ailing Stark Corporation are being summoned by the Department of Special Investigation (DSI) to answer charges that they falsified financial statements of the listed company.
Chanin Yensutchai is expected to meet with investigators on Wednesday while Satthra Chantharasetthaloet is due to do so on Friday, said Pol Maj Yutthana Phraedam, deputy director-general of the DSI, who heads the team investigating the case that has rattled the stock market.
Evidence gathered by the team and statements provided by witnesses strongly suggest the two falsified the financial statements of the wire and cable manufacturer and benefited as a result, in violation of the 1992 Securities and Exchange Act, said Pol Maj Yutthana.
Mr Chanin is rumoured to have fled the country. If he fails to respond to the DSI summons, he will face an arrest warrant, said Pol Lt Col Chakkrit Wisetkhetkan, director of the Bureau of Financial-Banking Crimes and Money Laundering at the DSI.
However, if the suspect is abroad but is willing to return to defend himself and formally notifies the DSI, the agency will wait, he said.
As the investigation continues, more suspects are expected to be named and summoned later, said Pol Maj Yutthana. Many investors, he noted, suffered losses after the share price of Stark plummeted 99% on the Stock Exchange of Thailand after news of an accounting scandal and bond defaults emerged.
Thawatchai Pittayasophon, acting secretary-general of the Securities and Exchange Commission (SEC), admitted earlier that the credibility of the Thai capital market was tarnished by the scandal.
Pol Maj Yutthana dismissed rumours that a former Stark executive had sent the DSI a written statement defending himself, saying the DSI had not received any such statement.
However, the DSI has received a request from Vonnarat Tangkaravakoon, the company’s acting chief executive and director, to meet investigators on Wednesday.
The DSI has yet to formally respond to the request, said Pol Maj Yutthana.
As of last Saturday, shares of Stark were suspended from trading until the company can eliminate the grounds for delisting as shareholder equity is negative.
The suspension followed the decision by the DSI to take up the fraud investigation as a special case.
Earlier last week the DSI seized over 100 million baht worth of assets from Stark, amid reports that damage caused by fraud could reach 100 billion baht.
From comics to cables
Stark’s origins go back to 1990, when it was founded as a comics publisher and distributor called Siam Inter Multimedia Plc. It changed its name to Stark Corp Plc in 2019, a year after Mr Vonnarat, the eldest son of TOA Paint founder Prachak Tangkaravakoon, acquired majority control of the company.
Mr Vonnarat transformed the publishing company into a maker of electrical wires and components by acquiring the Thai operations of US-based Phelps Dodge International.
Under Mr Vonnarat, Stark continued its rapid growth through acquisitions, including industrial products businesses in Vietnam. In May last year, it announced a €560-million deal to buy a Leoni Business Group Automotive Cable Solutions, a German automotive cable maker.
Stark raised 5.6 billion baht from investors to finance the deal but said in December it wanted to back out and use the funds for other purposes.
In February, its CEO suddenly resigned, citing personal reasons. Later that month, the company said it would miss a March 1 deadline for filing its financial statement, citing “some information” being reviewed by its auditor.
The SET last month announced plans for a “sweeping revamp of listing regulations” as the Stark scandal, debt defaults and unexplained share gyrations have hurt investor confidence.
