Stock crash and default raise alarm in Thailand

Stark’s shares plunged 92% on June 1, their first day of trading after having been suspended for more than two months. It also led to a cross default on the company’s other bonds and loans. — Bloomberg

ONLY a year ago Stark Corp looked like a Thai corporate success story. Backed by a wealthy local businessman, the nearly US$2bil (RM9.4bil) maker of electrical cables was an aggressive acquirer making its first major push beyond Asia.

Today, Stark has become one of the biggest financial worries in South-East Asia’s second-largest economy. Mired in an accounting scandal, the company has lost 99% of its market capitalisation and defaulted on some of its 39 billion baht (US$1.1bil or RM5.1bil) in liabilities.