The Securities and Exchange Commission (SEC) of Thailand has filed charges against Nantawat Samruanhan, a capital market auditor from Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. (Deloitte), with the Department of Special Investigation (DSI).
This follows findings that his auditing work did not comply with auditing standards in his role as auditor for STARK and its subsidiaries, which facilitated fraud and financial statement manipulation at STARK and its subsidiaries.
The SEC has also revoked Nantawat's approval as a capital market auditor for six years due to his serious overall non-compliance with auditing standards.
Previously, on 6 July 2023, the SEC filed charges against STARK Corporation Public Company Limited (STARK), its former directors, and 10 former executives with the DSI for jointly committing or consenting to false entries in STARK and its subsidiaries’ accounting records during 2021–2022, aiming to deceive others and disclosing financial statements in bond offering documents and prospectuses that appeared to be manipulated.
They also concealed facts in the factsheet used to offer STARK bonds. These acts constitute fraudulent deception, causing the public to be misled and resulting in financial losses.
These actions potentially violate Sections 312 and 281/2 paragraph two, together with Sections 89/7, 89/24, 278, 281/10, 300, 306, and 315 of the Securities and Exchange Act B.E. 2535 (1992) (as applicable).
The SEC reviewed Nantawat’s audit work on the 2019 to 2021 financial statements of STARK and its two key subsidiaries affecting consolidated financials: Phelps Dodge International (Thailand) Co., Ltd. (PDITL) and Adisorn Songkhla Co., Ltd. (ADS).
It found that his audit opinions on STARK and its subsidiaries' consolidated financial statements and STARK’s separate financial statements for 2019 to 2021 seriously failed to comply with auditing standards overall, including:
deficiencies in audit planning and risk assessment, testing of general ledger entries, analytical review, adjustments of risk assessments related to materially misstated information, and audit opinion reporting, due to insufficient and inappropriate evidence regarding accounts receivable, other current receivables, inventories, revenues, and service costs.
Criminally, this failure to comply with auditing standards facilitated fraud and financial statement manipulation at STARK and its subsidiaries. The SEC has already filed charges with the DSI for fraudulent acts and consenting to false accounting entries at STARK and its subsidiaries.
The SEC considers Nantawat’s actions to be violations under Section 287 of the Securities and Exchange Act. It has therefore filed charges against him with the DSI regarding his audit work on the 2021 financial statements for further legal action. These charges also result in Nantawat being disqualified from serving as a capital market auditor.
Administratively, due to his serious overall non-compliance with auditing standards on the 2019–2021 audits of STARK and its subsidiaries, the SEC has revoked Nantawat’s approval to act as a capital market auditor for six years.
However, as his approval ended due to disqualification from the SEC charges, the SEC has stipulated that any new application for approval by Nantawat to act as a capital market auditor will not be considered for six years starting 1 April 2026.
The SEC’s charges mark only the beginning of the criminal law enforcement process. Determining legal guilt is within the jurisdiction of investigators, prosecutors, and ultimately the courts. The SEC will monitor case progress closely and cooperate fully with relevant agencies to support enforcement under the Securities and Exchange Act after filing charges.
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