The Stock Exchange of Thailand (SET) and the Association of Investment Management Companies (AIMC) are preparing to use class action law to protect investors' interests as the Department of Special Investigation (DSI) probes potential fraud among former executives of Stark Corporation.
Manpong Senanarong, senior executive vice-president of the SET, said Stark shares dropped by about 90% after the SET allowed trading to resume from June 1, causing serious damage to investors, including holders of mutual funds.
The SET and AIMC have sought to assist retail investors by using class action laws to protect their equity interests, he said.
According to the SET, as of Aug 30 last year, mutual funds that held Stark shares included Bualuang Asset Management, which ranked among the company's 10 major shareholders by holding more than 276 million shares.
Other funds holding a small percentage of Stark's shares included Krungthai Asset Management, Kasikorn Asset Management, One Asset Management and Aberdeen Asset Management.
Most funds clarified that they already sold Stark shares in February 2023, before the company's problems became known.
Mr Manpong said Stark is in the process of conducting a special audit as instructed by the Securities and Exchange Commission (SEC), which it plans to disclose publicly via the SET. If the company is unable to meet the SEC's reporting deadline, trading of the stock will be suspended again.
Authorities stated the company is highly likely to default on payment of five series of corporate bonds worth nearly 9.2 billion baht.
Stark recently told the SET the company referred three former executives to the DSI and the Economic Crime Suppression Division (ECD) of the police after its audit committee was informed by PricewaterhouseCoopers ABAS Ltd that it detected suspicious behaviour by the managing director and two other executives.
In a filing to the SET on Tuesday, Stark's acting chief executive Vonnarat Tangkaravakoon said the audit committee was notified by its auditor on Feb 24 that it found reasonably suspicious behaviour regarding the performance of the director, manager, or people responsible for the company's operations.
The chairman of the audit committee then issued a letter informing the SEC that a working team was established to examine the facts, with an expert appointed to conduct a special audit.
Stark filed a complaint with the DSI and the Central Investigation Bureau (CIB) under the ECD, asking them to conduct an investigation and identify offenders for prosecution. Stark said it has cooperated with the authorities in terms of legal action.
"As investigations by the DSI and ECD continue, the company cannot comment on any details, though the SEC requested information on such matters," said Mr Vonnarat. "Comments could mar the legal process and affect prosecution."
However, the company will provide information about the progress of the probe, to the extent it can be disclosed, he said.
"The company is confident the DSI and CIB will successfully execute legal action against the offender and recover assets lost to fraud in order to compensate damage suffered by the company," Mr Vonnarat said in the filing.