Adrian JohnsonTLDR:
- The Thai Securities and Exchange Commission (SEC) is increasing its supervision of high-yield bonds in response to recent defaults and a major accounting scandal.
- The SEC plans to proactively reach out to companies at the first sign of payment issues and implement stricter monitoring and disclosure requirements for low-rated or unrated bond issuers.
The Thai SEC is ramping up its oversight of high-yield bonds following a series of defaults and a major accounting scandal. The regulator plans to take a proactive approach to identifying potential payment issues and providing early warning signals to companies. This move is aimed at enhancing payment security and investor confidence in the market.
As part of its increased supervision, the SEC will require more disclosure on financial data from companies with no credit rating or low credit ratings. The decline in high-yield corporate bond sales in Thailand, driven by concerns over rising defaults, has prompted the SEC to tighten monitoring efforts and take steps to prevent further surprises in the market.
The Thai stock market has experienced a turbulent year, with scandals, defaults, and volatility shaking investor confidence. One major accounting scandal involves Stark Corporation, a wire and cable manufacturer, which has been accused of doctoring financial statements, engaging in fraud, and money laundering. The scandal has resulted in an estimated financial damage of 14.78 billion baht and has affected nearly 5,000 investors.
The SEC’s increased supervision of high-yield bonds is aimed at preventing future defaults and scandals. By actively monitoring companies and requiring more disclosure, the SEC hopes to identify potential payment issues earlier and take necessary actions to protect investors.
