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The SEC has filed a criminal complaint against STARK and its former directors for disseminating false information about the company’s financial condition. The matter has also been reported to the AMLO.
The Securities and Exchange Commission (SEC) has filed a criminal complaint against Stark Corporation Public Company Limited (STARK) and its former directors/executives for disseminating false or materially misleading information about the financial condition and business operation of STARK. The complaint is based on the disclosure of inaccurate information regarding capital fundraising and share repurchase projects, as well as the fabrication of STARK’s financial statements for the year 2022. The SEC has also reported the matter to the Anti-Money Laundering Office (AMLO). The SEC emphasizes that the filing of the complaint is just the beginning of the criminal enforcement process, and it will continue to monitor progress and cooperate with relevant agencies.
The Securities and Exchange Commission (SEC) has filed a criminal complaint with the Department of Special Investigation (DSI) against five alleged offenders: (1) Stark Corporation Public Company Limited (STARK), and former directors/executives of the company, namely (2) Mr. Chanin Yensudchai, (3) Mr. Sathar Chantrasettalead, (4) Mr. Vonnarat Tangkaravakoon, and (5) Mr. Prakorn Makjumroen, for disseminating false or materially misleading information about the financial condition and business operation of STARK. A report on this matter has also been submitted to the Anti-Money Laundering Office (AMLO).
According to a referral from the Stock Exchange of Thailand (SET) and the SEC’s further investigation, it was revealed that during 13 December 2022 – 30 January 2023, STARK disclosed information through the SET Electronic Listed Companies Information Disclosure (ELCID) regarding the change in the use of proceeds from its capital fundraising by allocating 5.58 billion baht to a private placement and initiating a share repurchase project.
However, at the time, the total proceeds from the capital fundraising through the private placement had already been fully utilized. Furthermore, STARK lacked retained earnings or sufficient liquidity to carry out the share repurchase project as disclosed. Such act was deemed a dissemination of false information or details that could materially mislead the public and investors about STARK’s financial condition and business operation.
At the time of the incident, Chanin held the position of President, Sathar held the position of Chief Financial Officer, Company Secretary and Director, Vonnarat held the position of Director, and Prakorn held the position of Chief Executive Officer and Director. Additionally, the SEC has filed a criminal complaint against the four persons above for colluding or getting involved in the offense related to the fabrication of STARK’s financial statements for the year 2022*. As such, the four persons above were in a position to know that the company did not have retained earnings or sufficient liquidity to carry out the share repurchase project. Furthermore, Chanin and Sathar were aware of the fact that the additional capital of 5.58 billion baht had already been fully spent, and the four persons played a role in the company’s disclosure of such information.
The act of STARK is considered a contravention of Section 204 of the Securities and Exchange Commission B.E. 2535 (1992) (SEA), subject to the penalties under Paragraph 1 of Section 296 of the SEA. Meanwhile, Chanin, Sathar, Vonnarat and Prakorn, as responsible persons for STARK operations, ordered, acted, or omitted to order or act according to their duties, consequently causing STARK to commit an offense in the above case. They are therefore subject to the same penalties under Section 300 in conjunction with Section 240 of the SEA. The SEC has therefore filed a criminal complaint against STARK and the executives/directors with the DSI for consideration of further legal proceedings. In this regard, since the offenses in this case also constitute a predicate offense under the Anti-Money Laundering Act B.E. 2542 (1999) and related amendments, the SEC has also reported the matter to the AMLO.
Filing a criminal complaint by the SEC is only the beginning of the criminal enforcement process. As to whether any persons are offenders shall be subject to the investigation of the inquiry official, the prosecution of the public prosecutor, and the adjudication of the court of justice, respectively. In this regard, the SEC will monitor progresses in the legal proceedings and will cooperate fully with relevant agencies to support legal enforcement under the SEA after the criminal complaint has been filed.
Mr. Anek Yooyuen, SEC Deputy Secretary-General and Spokesperson, said: “This criminal complaint is an extension of the investigation aimed at taking further action against those involved in wrongdoing, following the SEC’s previous complaint against the persons colluding or being involved in the fabrication of the 2022 financial statements of STARK. The public can rest assured that the SEC strictly enforces the law within its authority, while also continuously coordinating and monitoring progress with the DSI and relevant agencies.”
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