Stark Corporation faked THB 8B in sales, then crashed from $1.7B to $11M

Stark Corporation was originally Siam Inter Multimedia (SMM), a comics publisher founded in 1990. In 2019, Vonnarat Tangkaravakoon — eldest son of the family behind Thailand's largest paint producer TOA — acquired majority control, renamed the company Stark, and pivoted it to electrical wire and cable manufacturing by purchasing Phelps Dodge International (Thailand). The company expanded rapidly through more acquisitions and briefly attempted a €560 million deal to buy German cable maker Leoni, which fell through.

A special audit by PricewaterhouseCoopers (PwC) later uncovered systematic accounting fraud. Stark had booked THB 8 billion in fake sales transactions in 2022 and THB 3.59 billion in 2021. The 2021 financial statements, originally reported as a THB 2.79 billion profit by Deloitte, were restated as a THB 5.97 billion loss. For 2022, Stark posted a net loss of THB 6.61 billion. The company had negative shareholders' equity of THB 2.9 billion in one year and THB 4.4 billion the next.

When Stark failed to submit its 2022 financial statements on time in February 2023, the Stock Exchange of Thailand suspended trading. Shares resumed in June and plunged 92% in one day, eventually wiping out 99% of the value. Market capitalisation collapsed from over US$1.7 billion to roughly US$11 million. The SET moved to delist Stark after it recorded negative shareholders' equity for two consecutive years.

Bondholders demanded immediate payment of over THB 6.9 billion. The Department of Special Investigation seized assets worth over THB 100 million. The Central Bankruptcy Court is set to declare Vonnarat Tangkaravakoon bankrupt, with 3,417 creditors holding combined claims of THB 131.4 billion. The Securities and Exchange Commission filed civil and criminal charges against former executives. The total estimated loss from the fraud, including damage to shareholders, bondholders and creditors, is approximately THB 100 billion.