A Thai court has granted permission to conduct class action proceedings against the local branch of the auditing firm Deloitte for its audit of the scandal-plagued Stark Corporation.

Deloitte Touche Tohmatsu Jaiyos is accused of “acting intentionally, negligently, or in a negligent manner resulting in damages” by Stark’s retail bondholders, who filed the lawsuit. Deloitte has been granted one week to file an appeal against the court’s decision.

According to the complaint, Deloitte, acting as auditors, certified a clean financial statement without making any comments or observations to warn that it might not meet accounting standards.

Balance sheets are frequently categorized as either clean or dirty. A clean balance sheet is characterized by a capital structure that is predominantly devoid of debt, along with an accurate representation of assets that do not include underperforming or non-productive items.

Organizations with clean balance sheets typically exhibit strong asset coverage and liquidity ratios, such as the current ratio, alongside low debt leverage ratios, which are assessed through metrics like debt-to-equity and various debt-to-earnings ratios, including earnings before interest and taxes (EBIT) and earnings before interest, taxes, depreciation, and amortization (EBITDA).

Lawyer Jinna Yamoaum, representing a group of 1,000 individual investors, indicated that compensation will be pursued based on the total value of the bonds along with accrued interest.

As part of a broader legal battle, the Deloitte case opens a new tab concerning Stark, a manufacturer of wire and electrical components that is presently being investigated criminally for allegedly colluding with top officials and making false claims.

More than 4,200 retail investors, banks, and financial institutions have been impacted by Stark’s 9.2 billion baht (267 million U.S. dollars) debenture default to date, and they have launched various lawsuits against the company.