The SEC accuses three former directors and executives of STARK and their associates for selling shares based on inside information.
The year 2023 has been a turbulent one for the Thai stock market, as several scandals, defaults and volatility have shaken investor confidence and prompted regulatory reforms.
Stark Corporation, a wire and cable manufacturer, has been involved in a major financial scandal. Executives and subsidiaries of the company are accused of doctoring financial statements, engaging in fraud, and money laundering.
The fraud has resulted in an estimated financial damage of 14.78 billion baht and has affected nearly 5,000 investors. The scandal has raised concerns about the competence of auditors and the slow response of law enforcement authorities, undermining investor confidence in the market governance.
SEC Alleges Insider Trading
The Securities and Exchange Commission (SEC) filed a complaint with the Department of Special Investigation, accusing three former executives of STARK Corporation Public Company of insider trading. The accused individuals are former CEO Chanin Yensudchai, former chief finance officer Sattha Chansetthalert, and Yosboworn Ammarit.
Financial Statements Under Scrutiny
The SEC alleges that STARK’s auditor had raised concerns about the accuracy of the company’s financial statements. As a result, the company was unable to submit its 2022 financial statements to the Stock Exchange of Thailand (SET) within the required timeframe. STARK Corporation Public Company is a wire and cable manufacturer.
The Department of Special Investigation (DSI) and the Anti-Money Laundering Office (AMLO) are also investigating the case. The scandal has led to a revision of rules on backdoor listing and has raised questions about the competence of auditors and law enforcement authorities.
If the allegations are proven true, the conduct of the three former executives would be in violation of Sections 242 and 296 of the Securities and Exchange Act and Section 83 of the Criminal Code. The trio is accused of using information from the company’s auditor to make decisions about off-loading their shareholding through Yosboworn’s account, potentially impacting the company’s share price.
The actions of Mr. Chanin, Mr. Sattha, and Ms. Yasoborn are considered an offense under Section 242 of the Securities and Exchange Act B.E. 2535 (Securities Act), with penalties outlined in Section 296, Section 296/2, and Section 83 of the Criminal Code, SEC.
The three individuals have been charged by DSI and further legal action is being considered. The SEC has also notified AMLO of the legal action in accordance with the Securities Act, which constitutes a fundamental offense under the Anti-Money Laundering Act B.E. 2542 and its amendments.
Assets freezed for 6 more months
The SEC has requested the Criminal Court to extend the asset freeze period for the accused in the Stark Corporation Public Company Limited (STARK) case. The court has granted permission to extend the freezing of assets for another 180 days from January 2, 2024.