Tax evaders, tycoons and the palace

3 04 2017

When the subject of tax comes up, one thing can always be taken for granted in Thailand: the elite will not lose anything for they are skilled tax minimizers and evaders.

In the Bangkok Post to day there are a couple of stories that can be brought together. First, we have news that “[e]vading taxes worth 10 million baht or more, or fraudulently filing for tax refunds of 2 million baht or more through collusion, shall be considered a money-laundering offence…” under a new law.

The notion that tax evasion is money laundering strikes us as strange, but you get the picture. The tax authorities want to be seen as going after tax evaders, something they have never done much of in the past, except in politicized cases.

So, we should see the Revenue Department go after “politicians” from previous regimes. We should also expect that the Department will examine the taxation records of the unusually wealthy who report huge wealth when they get junta perk positions. We can be pretty certain none of them paid tax on it.

That set us thinking. What about Police General Somyos Pumpanmuang? He is now head of the Thailand Football Association,  had long business relationships with mining companies, and at the time of his retirement as Thailand’s top cop, was one of its wealthiest policemen. Somyos was known to have ordered police to support companies he had previously worked with. He was so wealthy that he gave rewards to cops out of his own bag of money. Has he ever been taxed?

We can also wonder whether the 50,000 baht a month that was claimed and then unclaimed as income by metropolitan police chief Pol. Lt. Gen. Sanit Mahathavorn  was ever taxed? The lucky Sanit was on the payroll of the giant alcohol and beverage producer Thai Beverage Plc owned by one of Thailand’s wealthiest Sino-Thai tycoons, Charoen Sirivadhanabhakdi. Sanit’s total income was also claimed to be mammoth. Was that taxed?

While on companies and wealth, we wonder how much tax is paid by Charoen and his other fabulously wealthy fellow tycoons? They get great business deals from the corrupt state and from their unusual relationships, but how much do they “give back”? And we don’t mean the piddling corporate social responsibility ruses, we mean real tax.

Readers might recall the contract for the Queen Sirikit National Convention Center which went, without going to a bid or to any significant renegotiation, to N.C.C. Management & Development Co., a company in the gargantuan business empire of Charoen, reputedly worth almost $14 billion. Naturally, he’s also close to the palace.

Which brings us to another Bangkok Post story. Charoen has revealed “plans to develop a new mixed-use project to be called ‘One Bangkok’ on the 104-rai of land that formerly housed Suan Lum Night Bazaar on the corner of Witthayu and Rama IV roads.”

It seems odd that the “development will be joint venture by two companies owned by Mr Charoen, TCC Assets (Thailand) Co and Frasers Centrepoint Limited (FCL).” There must be a tax deal there somewhere.

The mammoth development will be on a lease the “TCC Group secured … from the Crown Property Bureau in 2014.”

Before the site was the Suan Lum Night Bazaar from 2001 to 2011, it was the Armed Forces Academies Preparatory School, established in 1958 “next to Lumphini Park in Bangkok…”. It moved in 2000, and allowed the tacky Night Bazaar to be built. Now, how did that land get back to the CPB? Was the military paying a peppercorn rent? Or was it “returned” to the CPB as so many other properties were. Did the CPB pay any taxes?

These deals can be exceptionally lucrative. Princess Sirindhorn is estimated to personally rake in about $54 million a year from the property she owns around the Siam-Rajaprasong area, and we know she isn’t paying tax.

Tycoons as royalists and royals, along with their helpers in the senior reaches of the civil and military bureaucracies don’t ever seem to be “threatened” with taxation.





Another junta crook gets off

15 03 2017

No corruption allegations ever sticks to the military junta’s allies, or so it seems.

In the case of Pol Lt Gen Sanit Mahathavorn, everyone, and we mean everyone, knows he did it. But, as The Nation reports, he is let off without a charge or even a slap on the “ethics” wrist.

The Office of the Ombudsman has given up or been pressured to give up its “probe into city police chief Lt-General Sanit … allegedly earning Bt50,000 a month as an adviser to the country’s biggest producer of alcoholic drinks, Thai Beverage…”.

The Ombudsman seems to have decided, as it often does, except where junta political opponents are involved, that “there was insufficient evidence to proceed with the case.”

Sanit’s “excuse” is that declaring the payment was an error. He claimed “that there was a mistake on his asset declaration as a new member of the National Legislative Assembly (NLA).” What kind of mistake? “He said he had asked others to handle the declaration for him and he had never worked for the firm.”

So the claim is that some underling conjured up his illicit payment from ThaiBev. He or she just had a dream and wrote it on the boss’s declaration. That’s buffalo manure, but the dolts and political flunkies at the Ombudsman “believe” it because there’s no “evidence” to the contrary (apart from the declaration).

More importantly, Thai Beverage “said in a letter to the office that it did not hire Sanit as an adviser.” They are fibbing too. Of course they pay him, and plenty of other cops too. Everyone knows they do this. But it is “good business practice,” and “everybody” does it and all the junta boys are on the take too.

The tough pussies at the “Ombudsman’s Office sent a notice to Sanit warning him to be more careful in the future by thoroughly checking documents when complied by another person on his behalf and submitted to an official body signed by him.”

So the company and the cop get away with it.

Can it get any more pathetic than this?





Corruption updates

13 03 2017

Two interesting reports, both suggesting how muddy the waters are around both cases, with the authorities being the ones throwing the mud.

First, and one of our favorites in recent times, the case of Pol. Lt. Gen. Sanit Mahathavorn. Sanit at first disclosed that he was receiving 50,000 baht a month from ThaiBev, owned by one of Thailand’s wealthiest Sino-Thai conglomerates. When questions were asked, he took some time to think up a story. Finally, a story was produced: Sanit claimed there was a “mistake” in his asset declaration. He claimed he had never been an adviser for the alcoholic drink giant, Thai Beverage Plc. And that story was relayed by the Office of the Ombudsman.

Khaosod reports that Sanit’s story doesn’t work for everyone. Now the Ombudsman says they don’t accept the lies claims. It says it has “obtained his original financial disclosure document and found it certified with his signature.” In other words, he was getting the payment.

The Ombudsman is only looking at “ethics rules.” Sanit, like many other top cops will be confused by this word “ethics.”

Given that both Sanit and ThaiBev have denied any financial relationship, some serious questions should be asked. We doubt anyone will ask any.

Second, the Rolls Royce saga continues with continuing confusing reporting. The Bangkok Post reports that “National Anti-Corruption Commission (NACC) plans this week to discuss the scope of an investigation into the alleged bribes paid to 26 former Thai cabinet ministers and executives of Thai Airways International (THAI) in the Rolls-Royce bribery scandal.”

The report adds that “the three NACC members and the NACC secretary-general will discuss the probe framework this week with the sub-committee tasked with finding facts in the alleged bribe payments.” They reckon they might need some more “evidence.”

And, oh yes, the “NACC will focus on the third phase of the bribery scandal that occurred between 2004 and 2005…”. That seems to mean they will only look at that period, when the government was with Thaksin Shinawatra. No politics here, of course, because the NACC says this is the only period not outside the statute of limitations on such alleged crimes.

What of that “ethics” word? Unlike the Ombudsman, the NACC seems to have forgotten it or never seen it. What about the idea of naming and shaming those in earlier periods? That might be a bit difficult for the NACC because they’d be up against the “great and good” who are strong allies of anti-democrats and military junta.





Money for nothing III

1 03 2017

Remember that case of the big liquor and beer firm ThaiBev paying the Metropolitan Police Bureau chief Sanit Mahathavorn a 50,000 baht a month advisor’s fee?

Well, we are now told it never happened! Just like magic, the allegation and even the policeman’s self-declaration is gone! Poof!

The Bangkok Post reports that Sanit “claims there was a ‘mistake’ in his asset declaration and insists he has never worked as an adviser for the alcoholic drink giant, Thai Beverage Plc…”. And that’s according to Thailand’s Office of the Ombudsman.

When you are a top cop it must be difficult to keep track of all the ill-gotten gains. There’s just so much of it.

Oh, and it wasn’t his declaration. “Pol Lt Gen Sanit claimed his asset declaration submitted to the National Anti-Corruption Commission (NACC) contained a ‘mistake’ because he did not prepare it himself, which caused a misunderstanding among his staff.”

And guess what? The company supports him! “In fact, Pol Lt Gen Sanit claimed he has never done the job in question, an assertion now backed up by the beverage giant itself.”

Whew! We are so pleased that’s all sorted out. We just wonder what Sanit’s next magic trick will be. It is such a wonderful performance. And to have the country’s richest as a supporting act is just so, well, revealing!

We imagine that any documents pertaining to the non-position and non-salary are now non-documents.

Seriously, Sanit and his business buddies must think the Thai public a bunch of dolts if they think that such a ridiculous, cobbled together nonsense can be believed. But what these crooks do know is that they expect impunity.





The corruption glacier I

14 02 2017

In a recent post, PPT commented on the many failures of the National Anti-Corruption Commission: it is politicized, biased and just plain slow. Glacially slow.

Two stories today emphasize these points. The first seems like a story of stalling, inertia and perhaps incompetence. Yet is also illustrates the politicization of corruption and bias. We only cover that story in this post and will follow up with a second but related post on the other story.

At the Bangkok Post, former academic and former NACC commissioner Medhi Krongkaew raised questions “over the slow progress of the investigation into alleged bribery payments made by a British alcoholic beverage giant [Diageo] to Thai officials in 2011.” Back then, Diageo “agreed to pay the US Securities and Exchange Commission more than US$16 million (561 million baht) to resolve Foreign and Corrupt Practices Act offences involving bribes to foreign officials in India, Thailand, and South Korea between 2003 and 2009.”

In this case, the official/political figure is pretty well identified, but not in the Bangkok Post story, which kind of fades away. Medhi lets himself off the hook by saying “he was not responsible for probing the case, all he could do was forward the information received from the US to the other NACC members who were directly responsible for the investigation…”. He said, “I don’t know what has been hindering them…”.

It’s not a bad question for both Medhi and the NACC are anti-Thaksin Shinawatra, and this case is about people close to him. Part of the story is here. But the more detailed account is a PDF. This is a bit long, but worth reading through:

From April 2004 through July 2008, DT [Diageo Thailand], retained the services of a Thai government and foreign political party official … to lobby other Thai officials to adopt Diageo’s position in several multi-million dollar tax and customs disputes. For this … DT paid approximately … $599,322. DT compensated the Thai Official through 49 direct payments to a political consulting firm … for which the Thai Official acted as a principal. Most, if not all, of the $599,322 paid to the Consulting Firm was for the Thai Official’s services and accrued to his benefit.

The Thai Official served as a Thai government and/or political party official throughout the relevant period…. At various times the Thai Official served as Deputy Secretary to the Prime Minister, Advisor to the Deputy Prime Minister, and Advisor to the Ministry of Agriculture and Cooperatives. The Thai Official also served on a committee of the ruling Thai Rak Thai political party, and as a member and/or advisor to several state-owned or state-controlled industrial and utility boards.… The Thai Official was the brother of one of DT’s senior officers at that time. Several members of Diageo’s global and regional management attended meetings with the Thai Official and senior members of the Thai government.

The Thai Official provided extensive lobbying services on behalf of Diageo and DT in connection with several important tax and customs disputes that were pending between Diageo and the Thai government. For example, with respect to excise taxes, the Thai Official coordinated and attended numerous meetings between senior Thai government officials and senior Diageo and DT management, including two meetings in April and May 2005 with Thailand’s then Prime Minister. In May 2005, shortly following the meetings arranged by the Thai Official, the Prime Minister made a radio address publicly endorsing Diageo’s position in … calculating excise taxes.

On Diageo’s behalf, the Thai Official also met repeatedly with senior commerce, finance, and customs authorities in charge of the transfer pricing and import tax disputes, as well as with members of the Thai parliament. The Thai Official’s services contributed to Diageo’s successful resolution of several components of these disputes…. Based in part on the Thai Official’s lobbying efforts, the Thai government accepted important aspects of DT’s transfer pricing method and released over $7 million in bank guarantees that DT had been required to post while the tax dispute was pending.

DT improperly accounted for the monthly retainer that it paid to the Thai Official through his Consulting Firm….

Diageo essentially made “improper payments to government officials…”.

Anyone familiar with the NACC and the political nature of its work would think this is a home run. They can get the easily identified TRT official and send some barbs Thaksin’s way as well.

Or can they? After all, back in December, it was revealed that metropolitan police chief Pol. Lt. Gen. Sanit Mahathavorn was on the payroll of the giant alcohol and beverage producer Thai Beverage Plc. The top cop was, and we assume, still is getting 600,000 baht a year as an “adviser” to the alcohol firm.

That seemed like a conflict of interest to many, but not to the police force. The Bangkok Post reported that the Royal Thai Police “confirmed that metropolitan police chief … is not violating police rules by holding an advisory role with a major alcohol conglomerate.”

If it’s “good” enough for the police, then presumably an official/adviser/deputy secretary to a premier/committee member of a political party/member and/or adviser to state-owned/state-controlled boards/consultant is in the clear as well?

Medhi’s raising an opportunity for political point scoring. Why hasn’t it and isn’t it being hit out of the park? Corruption Park?

We say more in our next post.





Busy “adviser”

8 02 2017

Perhaps if the Office of the Ombudsman paid Metropolitan Police chief Pol Lt Gen Sanit Mahathavorn 50,000 baht a month, he might have been able to supply it with the documentation on his monthly payment from Charoen Sirivadhanabhakdi’s ThaiBev.

Instead, the “busy” General “has asked the Ombudsman for another month to explain his paid advisory role with giant alcoholic drinks producer Thai Beverage Plc.”

How complicated can explaining a 50,000 baht payment for being an “adviser” be? The report states that “Thai Beverage had submitted a written explanation, but details could not be disclosed until the city police chief submitted his clarification.”

More complicated might be explaining the curious math in his assets declaration. He might like to explain how a policeman with a yearly salary of 1.4 million baht (and that’s now, not earlier in his career) can accumulate cash deposits worth about 44 million baht (with his spouse). Throw in other assets held like land and houses, and the policeman and his wife are worth more than 93 million baht.





Planes, trains and beer

5 02 2017

What do planes, trains and beer have in common? The answer is they are all great money spinners.

On planes, despite the junta having ordered that only one agency deal with the poor, confused British Serious Fraud Office, multiple agencies are still trying to appear that they are doing something about money-spinning corruption.

The Bangkok Post reports that “Rolls-Royce has refused to supply information about its bribery admission involving Thai Airways International (THAI) with the national flag carrier’s probe panel.”thai-rr

Refused! Wow! Thai Airways really want to find out! Who did get “kickbacks totalling 1.28 billion baht, which were allegedly paid to help the British firm secure deals with the carrier”?

So they went to RR, not the SFO. The carrier’s president “revealed” that “a request for information linked to the graft, Rolls-Royce refused to share it with THAI’s probe panel, saying the information it gave to the SFO was confidential…”.

Just to confuse the SFO, the president said his company “had also asked the SFO for relevant information on Jan 24 and the British anti-graft authority replied it would respond to the request within 20 days…”.

He added that “the national carrier stood ready to supply all related information to state agencies tasked with probing the case.” He finally came around and said: “As for the inquiry into who received the bribes, the NACC will play a key role in investigating the matter. So results of the NACC’s probe, which is gathering information from all sides, must first be concluded…”.

Finally, he “conceded it is unlikely that THAI would be able to receive information from other parties apart from what has already been publicised.”

So what was the point of the story? And why go to RR? We assume its to confuse things. After all, commissions are lucrative and running interference may maintain that source of wealth.

Another Bangkok Post story tells readers about trains and some other forms of transport. It says that the junta’s “raft of big-ticket infrastructure projects has grown to 2.2 trillion baht in value…”. That seems to us math-challenged dopes to be $68 billion. Agents, contractors, top bureaucrats, not to say Chinese state transport and engineering firms, must be counting the money in their dreams. And this is only the big ticket items.trains

Finance Minister Apisak Tantivorawong says these projects are meant to power the economy. All other sectors, apart from tourism, seem to have tanked. The problem with this “infrastructure Keynsianism” is that the wealth created is mostly captured by the royalist elite and Sino-Thai tycoons.

So how does beer fit the pattern?

Yet another Bangkok Post account asks, in an editorial, why people are fined for producing “craft beers.” It cites Prime Minister, Dictator, General and expert on everything, Prayuth Chan-ocha and why it it so problematic to make “craft beers and microbrews to go on sale legally.” He babbled about “[c]onsumer safety, fair trade and an ability by producers to maintain standards and take responsibility if things go wrong…”.

Odd, we thought, aren’t there microbreweries all over the place? Even in the provinces, and for decades past.

Why the sudden worrying about these? The story gives a hint:

The news report [on the fining of a craft brewer] sparked outrage online as many people questioned whether it was time the government recognised the increasing demand from consumers for diverse kinds of beer instead of relying on a few well-established brands.

They also believe that opening up the monopolised beer market will nurture innovation, create equal opportunities for aspiring brewers and foster fairer competition which will benefit consumers in the end.

… One notable question that has come up during the craft beer debacle is whether it is necessary for the government to only give licences to beer producers on an industrial scale.

Under the finance minister’s order in 2000, only two types of licences are available for beer production. The first is for large-scale industries with a capacity of no less than one million litres a year. The second is for brew pubs, which have to produce at least 100,000 litres a year for sale onsite with no bottling.

beersWho is being protected? Of course, its royalists and the astoundingly rich who operated with huge profits. Boonrawd Breweries and ThaiBev.

The former goes back to the period before 1932 and the company and the scions of the Bhirombhakdi family have long supported royalist and, more recently, anti-democrat causes.

The latter has managed to establish one of the largest alcohol and land empires in the country. It, too has allegedly funded anti-democrats and is a big donor to the palace.

It has recently been in the news, getting a contract approved by the junta without competition to run a huge convention facility for another 25 years as nominal rent. And, of course, it’s been in the news over why it pays a top cop as an adviser? Perhaps the answer is in The Dictator’s comments?