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Corruption lawsuit targets AoT, King Power

This material belongs to: Bangkok Post.

A lawsuit has been filed against 18 executives and officials of Airports of Thailand (AoT) and King Power Group, the country’s sole duty-free operator, for alleged malfeasance in connection with a duty free concession contract, allegedly causing damages of 14 billion baht.

Charnchai Issarasenarak, deputy chairman of the subcommittee on the anti-graft mechanism under the National Reform Steering Assembly (NRSA), filed the lawsuit Wednesday at the Central Criminal Court for Corruption and Misconduct Cases.

Charnchai: Under-table deal cost state ‘substantial loss’. Source: Bangkok Post.

According to the suit, 14 AoT officials, some of them former board members, and four King Power executives colluded to infringe the laws and forged an agreement which allowed the private sector to gain benefits beyond what the contract stipulates.

According to Mr Charnchai, the AoT and King Power earlier entered into a contract that 15% of the company’s revenue from product sales at Suvarnabhumi airport’s duty free shops must be distributed to the state coffers. However, the then AoT board later granted the collection of only 3% of the firm’s revenue.

The decision caused 14.29 billion baht in damage to the state, he said.

He also asked the court to consider punishing the culprits and seize the 14.29 billion baht from them as it has caused substantial damages to the state.

Mr Charnchai, who is also an ex-Democrat MP for Nakhon Nayok, said the case is only the first of five lawsuits planned to be brought against those linked with irregularities surrounding King Power’s operations.

In this case, the breach of contract could affect small shareholders of the AoT, he said. Anyone buying AoT stocks today could suffer from a fall of share prices and those who purchase them later would also be adversely affected.

“The state officials worked in favour of the private company which subsequently led to a substantial loss in state revenue,” said Mr Charnchai, adding the unlawfully-obtained benefits should be returned to the state. “I want this case to serve as an example,” he added.

He said he would send information on the alleged irregularities to Prime Minister Gen Prayut Chan-o-cha so the premier could take action against officials involved.

The premier earlier raised questions about King Power whether any laws had been breached by the firm and whether anyone should be dismissed as well as how much damage had been caused, he said.

Asked when he would file the next lawsuit in connection with King Power cases, Mr Charnchai said it could be about two months.

Based on the lawsuit filed Wednesday, he said he acted similarly to the National Anti-Corruption Commission (NACC) and public prosecutors handling corruption cases.

“Filing lawsuits against someone is not fun as they [opponents] could counter-sue. But I have checked the accuracy of the information,” Mr Charnchai said.

The court is scheduled to rule whether the lawsuit will be accepted for deliberation on July 25. Based on the lawsuit, the plaintiff names 83 witnesses to give testimony, including Gen Prayut, who is placed as the second witness in the document.

Responding to Gen Prayut being named as a witness, Mr Charnchai said this followed what he had discussed with Adm Phajun Tampratheep, chairman of the NRSA’s subcommittee on anti-graft mechanisms. After submitting the lawsuit, he said he would report to the prime minister since the premier had raised questions about the case.

The proposal to end the contract with King Power was made by a NRSA committee at a meeting on April 25, chaired by Deputy Prime Minister Wissanu Krea-ngam. The panel said the duty-free firm failed to comply with the act.

King Power Group CEO Aiyawatt Srivaddhanaprabha has insisted the company has done nothing which breached the 1992 Private Participation in State Undertaking Act. The company has run the duty-free business for more than 10 years, and if the firm had committed any offences, it should have been found guilty long ago, he said.

AoT president Nitinai Sirisamatthakarn earlier confirmed King Power strictly adhered to the contract it made with the agency, particularly allocating returns to the state in line with the space it occupies and its sales.

He said King Power distributed returns to the state based on averages. In some years, it distributed to the state sales revenue higher than 15%, or between 1.2-1.6 billion baht a year in the first five years. The company was required to pay more, ranging from 16%-20% of its sales revenue to the state between the 6th to 10th years.

In addition, after King Power won the concession in 2006, the AoT also required the company to pay a two-year benefit in advance to the state worth 2.46 billion baht.

King Power has also been hit with criticism after other companies were not permitted to set up duty-free pickup counters at the airports. The AoT and Customs Department told the public that this can be done when the concession contracts with King Power ends.

King Power’s contract at Suvarnabhumi is scheduled to expire on Sept 27, 2020 while the contract for Don Mueang airport will run out on Sept 30, 2022.