Stark Corporation Provides Update on Preparing Financial Statements and Special Audit Progress after Investor Complaints to SET

Stark Corporation Sift a letter informing the stock market on the progress of preparing financial statements. and various actions Hope to unlock to come back to trading again After investors complained to the SEC

Mr. Vonnarat Tangkaravakoon Director and authorized signatory Stark Corporation Public Company Limited or STARK sent a letter to the Stock Exchange of Thailand or SET that according to Stark Corporation Public Company Limited (STARK) has clarified the operation of the company through the dissemination system. Information of the Stock Exchange of Thailand Which means that the company expects to be able to submit the financial statements for the year 2022 that have been reviewed by the auditor by June 16, 2023 and the company is in the process of hiring an auditor to perform a special audit ( special Audi) as well as clarification on the resolutions of the bondholders’ meeting No. STARK239A and STARK249A, which resolved not to exclude the event of default and exercise the right to call the company to pay the debt, press and promptly punch the premium under the bonds. and filing complaints to relevant agencies concerning suspicious behavior in regards to the operation and performance of directors, managers and/or any person responsible for the operation of the company in accordance with Section 89/25 Securities and Exchange Act B.E. 2535 (details appear in references 1-3) and the SET has requested the Company to provide information on the progress in such matters.

The company would like to clarify the progress and information of the situation of the company as follows:

1. Progress on preparation of financial statements for the year 2022 The Company has cooperated and worked closely with the auditor, Price Water House Coopers ABAS Ltd. (‘PWC’) in jointly analyzing financial and accounting information of companies in Auditing and preparing financial statements for the year 2022 according to the operational plan clarified to the SEC and the SET. and action It has made great progress. The auditor therefore expects to be able to issue audited financial statements within June 16, 2023.

When the auditor prepares the financial statements for the year 2022 already The company will call the annual general meeting of shareholders to certify the 2022 financial statements and appoint the auditor for the year 2023 between July – August 1963.

2. The progress of the investigation as a special case within the scope that the SEC Office allows to expand further. (extended-scope special audit)

On June 7, 2023, the audit committee meeting of the company resolved to approve the appointment of PwC as an auditor to conduct a special audit within the scope of the SEC to extend the results. -scope special audit) Because PWC is a special audit person, originally had a good understanding of the company’s information. able to proceed as required by the Office of the SEC to extend the results without inducing me Therefore, the auditor is qualified to carry out such work.

and related accounting items to the extent that the SEC Office requires further examination even though the Company has already received such information from several banks But there are still many pieces of information that the company is still waiting for information. Or a limitation on traceability is detected.

Due to additional special investigations, there are a large number of documents and information to be examined to cover sales transactions, accounts receivable, debt collection of 4 major subsidiaries between 2021 and 2022, including comparison. Bank statement and general ledger movements between 2021 and April 2023 and traceability issues. The company and the auditor have jointly assessed the availability of information. and it is expected that it will not be able to carry out a special audit within the scope of the SEC to extend the results (extended-scope special audit) to be completed by June 16, 2023. The company therefore requested assistance. to the SEC to extend the period to perform this part for another 30 days in order for the audit to be effective. It has examined the facts appropriately and sufficiently to verify the accuracy of information in the financial statements in accordance with the objectives specified by the SEC Office.

In this regard, the auditor expects to be able to summarize the results of the audit as a special case within the scope that the SEC Office allows to expand. (extended-scope special audit) within July 2023, and the company will periodically report progress and problems and obstacles in the operation.

3. Situations and impacts on the company as a result of being called for repayment of debentures Including procedures for repayment of the outstanding debts of the company because the debenture holders of the debentures No. STARK239A and STARK249A have resolved not to waive the event of default and exercise the right to claim that all principal and interest debts under the debentures are immediately due. As a result, the total amount of outstanding principal debt 2,241,000,000 Baht and the interest under the debenture number is due immediately.

The event of default also resulted in cross default on the other three tranches and the Company’s financial contracts, i.e., an event of default under (a) the Sudden Bonds STARK245A, STARK255A and STARK242A, for which the total outstanding principal amount was 6,957,400,000 baht and (b) other financial contracts of the Company, the Company has to negotiate with relevant creditors who may exercise the right to claim all debts in the same way.

However, when the auditor has disclosed the financial statements for the year 2022, the company will adjust and summarize both short-term and long-term business plans to be consistent with the results according to the financial statements for the year 2022, including plans to negotiate with important creditors (both financial creditor trade payable and other groups of creditors) to find ways to manage debt repayment together and prevent the occurrence of advantages and disadvantages between creditors. as well as reducing the risk arising from any action that may be considered discriminatory or the risk of debt revocation, which the Company will disclose additional guidelines for the Company’s actions later.

4. The Company’s actions in coordinating with various agencies with legal authority to speed up the investigation and investigation of the perpetrators.

In addition to the appointment of a new executive to serve as Chief Financial Officer and various departments. relevant and improve the internal control system to be more concise To enhance management efficiency and prevent damage to the company. and verification of financial transactions Account information account statement In-depth financial paths and amounts involved by auditors and relevant experts; The company filed a complaint with the Department of Special Investigation. and the Economic Crime Suppression Division, the Central Investigation Bureau. To investigate and investigate to find the perpetrators to prosecute and punish according to the law to the end

Because the company has provided an extension of the investigation of abnormal financial transactions (forensic accounting) by relevant experts. Along with the special audit, the company has cooperated in providing in-depth details as the experts have extended to the above two agencies from time to time and have gradually delivered information and Evidence as provided by the Company to both entities on an ongoing basis. To support evidence gathering, work and investigation of both agencies.

However, due to limitations in the legal process The company is unable to disclose other details in this regard. Therefore would like to ask for the courtesy of informing the progress and information that can be disclosed. (According to the opinions of relevant agencies) to the SET later on.