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Thai SEC to ramp up supervision of high-yield bonds following defaults and accounting scandal
The SEC plans to proactively contact companies when there are potential issues with their ability to service high-yield debt, in order to provide early warning signals.
The Securities and Exchange Commission in Thailand is increasing its supervision of high-yield bonds following recent defaults and a major accounting scandal.
- The Securities and Exchange Commission in Thailand is increasing supervision of high-yield bonds to enhance payment security and investor confidence following recent defaults and a major accounting scandal.
- The SEC is now proactively reaching out to companies at the first sign of potential payment issues and plans to implement stricter monitoring and disclosure requirements for low-rated or unrated bond issuers.
- The decline in high-yield corporate bond sales in Thailand, driven by concerns over rising defaults, has prompted the SEC to tighten monitoring efforts and take steps to prevent further surprises in the market.
The SEC will pay more attention to bonds of companies with no credit rating or low grades, requiring more disclosure on financial data. This increased monitoring comes after a 19% decline in total domestic debt sales in 2023, with high-yield corporate bond sales being a key factor.
The market for speculative debt has been rocked by payment delays and corporate scandals, leading to a decline in corporate bond sales.
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.
Excessive volatility in some shares, including the nation’s most valuable company, and an accounting scandal that led to a bond default at a listed electric cables maker are among the latest events that have shaken investor confidence.
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.
