A 99% Stock Crash and Shock Default Raise Alarm in Thailand (2)

Only a year ago Stark Corp. looked like a Thai corporate success story. Backed by a wealthy local businessman, the nearly $2 billion 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 Southeast Asia’s second-largest economy. Mired in an accounting scandal, the company has lost 99% of its market capitalization and defaulted on some of its 39 billion baht ($1.1 billion) in liabilities.

With doubts swirling over the company’s survival, money managers have pulled back from bonds issued by lower-rated Thai companies ...