Thailand’s regulator has filed charges against the largest holder and others involved in the management of Stark Corp., an industrial cable maker at the center of an accounting scandal and debt default.

The Bangkok-based Securities and Exchange Commission filed charges of financial misconduct against 10 entities and individuals, including Stark’s largest holder Vonnarat Tangkaravakoon, with the Department of Special Investigation, according to the regulator’s statement.

The charges come after Stark faced a criminal investigation and a class-action lawsuit following its revelations of irregularities in past accounting. Restated financial results showed it incurred a net loss in the past two years, and that its liabilities exceeded its assets. The company last month defaulted on some of its 39 billion baht ($1.11 billion) in liabilities. The shares were suspended after sinking 99% this year.

Those involved, including former chairman Chanin Yensudchai and former chief financial officer Sathar Chantrasettalead, concealed details and made false statements about the company’s accounts, and hid information on debenture sales and a planned investment in German firm Leoni AG, according to the regulator. Stark has yet to acknowledge the charges, said an official contacted by phone who declined to be identified citing company policy.

“The SEC’s action is a good step, but better regulations would help restore investors’ trust,” said Jitipol Puksamatanan, head of macro and wealth research at CGS-CIMB Securities Thailand Co. “Investors’ confidence will return when there are clear rules to prevent companies from committing accounting irregularities like this again.”

The watchdog’s steps against Stark follows other corporate scandals since late 2022. In September, crypto exchange operator Zipmex Thailand was accused of skirting the country’s digital assets rules. Two months later, authorities froze the assets of More Return Pcl investors because of possible fraud, according to local media reports.

Vonnarat, the largest shareholder and a scion of one of Thailand’s wealthiest families, had been tasked with keeping Stark afloat after the departure of key executives earlier this year, when the firm first delayed releasing financial statements. The company last week said it’s planning to restructure its debt to stave off a forced delisting, adding it may ask creditors to swap their debt into equity and try to convince its major creditors not to pursue an accelerated debt payment.

Shares of TOA Paint Thailand Pcl, in which Vonnarat held a 9% stake as of last August, have sunk more than 20% since the end of May. TOA declined to comment.

Before becoming one of the biggest financial worries in Southeast Asia’s second-largest economy, Stark looked like a Thai corporate success story. Backed by a wealthy businessman, only a year ago the then nearly $2 billion company was making its first push out of Asia with plans to buy an automotive cable unit of Germany’s Leoni for €560 million. Last month, however, the Thai firm cited Russia’s war in Ukraine for pulling out of the deal.

--With assistance from Pathom Sangwongwanich.

(Adds details of charges, background from the fourth paragraph.)