Deadline is tonight for Stark shareholders to join lawsuit
The number of shareholders seeking damages over the meltdown of Stark Corporation Plc's stock has reached more than 1,300.
A total of 1,352 individual shareholders are seeking compensation of 2.5 billion baht.
Nuttawut Rungwong, the chairman of the board of directors of Tontarn Corporation Investment Advisory Securities Co Ltd, provided an update on the progress of bringing together investors affected by the collapse of Stark Corporation Plc's share price. He urged the victims to come forward and sign up online before the deadline at midnight today (June 25).
After compiling the list of victims, the Thai Investors Association will collect all the necessary evidence to be submitted to the lawyers handling the group litigation.
The victims' representatives will file the class-action lawsuit on behalf of all complainants. Only victims who participate in the lawsuit will be eligible for compensation, Nuttawut said.
Both criminal and civil action will be taken against the wrongdoers. Similar cases have been concluded in other countries with criminal proceedings and payment of damages to victims.
Currently, 1,352 individuals of the total 11,000 Stark shareholders have already signed up, seeking damages amounting to 2.5 billion baht.
To assist the victims, the Thai Investors Association has collaborated with the Lawyers Council of Thailand and a group of experienced lawyers in handling group litigation and business-related cases. They have joined forces to seek justice for investors and hold the wrongdoers accountable. Additionally, they aim to encourage regulatory bodies overseeing the stock market to establish more effective measures to prevent and regulate companies in the stock market
Nattawut said that Stark shares had previously reached their highest market price at 5.50 baht a share, with a market capitalisation of 73.733 billion baht. However, as of yesterday (June 24), the stock price has plummeted to its lowest point at 0.02 baht, valuing the total stock at only 268 million baht. This represents a loss of 73.6 billion baht for the shareholders.
Ordinary shareholders and victims are almost left with nothing, but the creditors who hold collateral, trade creditors, and debenture holders may still have some hope of recovering their debts, Nuttawut said. However, investors in the stock market were previously warned of the risks associated with investments, but the Stark case had resulted from the dishonest actions of those involved, he said. Therefore, individual shareholders have united to gather evidence for group litigation and proceed with a class-action lawsuit.
Individual investors have coordinated with the Thai Investors Association to fill out the information form to initiate group litigation.
Stark Corporation Plc, a wire and cable manufacturing firm listed on the Stock Exchange of Thailand (SET), is suspected of fraud by its former executives, who allegedly tried to hide the company’s accumulated losses during 2021-2022 of 12 billion baht, 4 billion of which is reportedly negative shareholder equity.
The issue came to light after Stark Corporation failed to submit its financial statements within the deadline required by law.
The Securities and Exchange Commission (SEC) had earlier warned that the company was likely to default on five tranches of corporate bonds repayment of nearly 9.2 billion baht, as Stark's financial statement, finally submitted on June 16, showed it has more liabilities than assets. The SET said Stark Corporation faces a possible delisting.
