A Flying Sporran Enquiry, Bangkok
November 9th 2011 (Updated 11-11-11)
The British President of a Rotary Club in Thailand has reportedly been detained and had his passport confiscated after being accused of swindling foreign property investors out of millions of pounds.
Richard Haughton, 63, a former Tupperware salesman, from Birmingham, was cautioned by officers of the Department of Special Investigation from Chonburi and then released.
Also facing investigation are Britons Nicholas Pearce, and Paul Salisbury.
All three are directors of a property company called Thailand Property and Media Exhibitions Co., Ltd (TPME) based in the beach resort of Pattaya.
Its alleged that all three people set up a series of property companies in Pattaya to defraud foreign buyers of their cash, knowing the victims could do little to protect themselves while living abroad. Several projects in the Pattaya area are involved in the controversy.
TPME's Chief Financial Officer Haughton, aka the boss, has played a major role in the Pattaya-Jomtien Rotary Club and until recently cut a lordish figure around town, being photographed handing over gifts to the needy. In the picture above he has just paid 10,000 baht (for a bottle of cognac) to go to victims of the Japanese Tsunami.
Prior to arriving in Pattaya to become a 'property tycoon' his previous jobs included running a video rental shop, and being a top regional salesman for 'Tupperware'.
Nicholas Pearce, the Chairman of TPME, aged 51, (left) from Brighton, Sussex, arrived from Thailand after his grass cutting company 'NiceNStripy' in the south of England in formed in 2004 went bust with massive debts and was finally wound up last year.
In the wake of the controversy Pearce has now returned to Britain where he has secured work as a 'financial advisor' and has no intention of returning to Thailand in the near future.
A quick look at the business graph of 'NiceNStripey' supplied by CompanyCheck.uk shows a mode of operation which, while not uncommon in the UK, can be described as characteristic of many property company start-ups by what are losely termed 'foreign businessmen' in Thailand.
In Thailand law enforcement authorities have traditionally shown little interest in what some foreigners do to other foreigners. It has not yet been possible to establish how the investigation is progressing.(Updates will be provided here)
But a former employee of the company, Martin Simons, another Briton, who has been briefing the victims, has not yet been interviewed; yet he left the company with considerable documentation.
Simons, the 'whistle blower' has offered full co-operation with the authorities. He claims he was disgusted at what he discovered when he was called in on a short term contract and asked to resolve the company books. He is currently in litigation with the company after refusing, he says, to take part in illegal actions. He descibes the actions by TPME as 'Ponzi'.
NiceNStripy - the bottom line
Was Really Pool Boy a Merrill Lynch trader?
The third director Paul Salisbury, the CEO of TPME, also 51, from London, reportedly claimed to be a former trader with Merrill Lynch. No records can be found of this but he was the owner of a swimming pool service company in Pattaya called 'Everything Pools' and has recently been selling stock on the BahtSold Thai website.
Yesterday both Salisbury (below) and Haughton were still in Pattaya. Neither were answering calls and phones at TPME rang out. The office in Thepprasit Road, Jomtien has been closed and Haughton has removed to other so far 'secret' premises. He has been telling colleagues that he has no problems with the DSI and that the matter is just a typical business dispute.
In fact the DSI's role in this has indeed been rather odd if accounts by the buyers are to be believed. Victims claim local Pattaya police would not accept the case and it would have to go to the DSI.
They claimed they were then told by the DSI to accept an offer to get their cash back or they would get nothing. If they went to Consumer Protection they would also get nothing. The DSI would almost certainly deny this claim.
Meanwhile two bank accounts of Haughton have been closed and two others have been cashed out, according to Martin Simons who secured a freeze order against a court judgment.
Haughton is due to appear in court on November 16th in another labour dispute with a former British manager Robin Warren who has also left TPME. He expects to win his case but is not confident against getting any cash from Haughton.
"Ironically while I was working for Richard Haughton and not being paid I also lent him money to pay off an instalment of his BMW," he said.
Salisbury has left his normal accommodation to take temporary lodgings. He has told friends that he has been told a stop has been put on him leaving the country.
At the centre of the controversy is a luxury apartment block called Emerald Palace on Pratamnak Hill, Pattaya, near Cozy Beach, a wealthy part of the Thai beach resort, which went up for sale off-plan to buyers in 2005, amid a fanfare of local publicity. Much of that publicity was provided by another ex-President of the Pattaya-Jomtien Rotary Club, Niels Colov, who as part of a barter accepted two units at another of Haughton's projects, Lake Villas. Colov, a former pimp in Copenhagen, runs Pattaya People Television and Pattaya People newspaper and rose to the ranks of leader of the Pattaya Police Volunteers.
Over 60 units were sold, but in 2007 work stopped completely for 2 years when the company apparently ran out of cash.
Worked started again after the company secured a loan - but when buyers recently turned up to move in they discovered that in July all their properties had been remortgaged out to the Kasikorn Bank, which is owed 71 million baht.
A section from the documents showing the units mortgaged out to Kasikorn Bank
They were apparently offered their cash back for the properties, which are now valued up to four times more than they paid. The money was coming from a 'mystery buyer'. But the offer was withdrawn. It subsequently appears to have come from a company called 'Headland Holdings Ltd' - one of Haughton's companies. This say the victims is the offer the DSI had told them to accept.
Victims are concerned that they were photographed outside Emerald Palace by a Thai woman in the employ of Headland Holdings. In fact the woman is Richard Haughton's girlfriend Sripat Boontham, whose name is on the land documents for Emerald Palace and Lake Villas.
One of the Emerald Palace buyers, Curtis Buckley, 51, an oil worker from Toronto said: "To say people were offered their cash back is something of an exaggeration.
"It was claimed that a new buyer was willing to put cash in so the original investors would get their cash back. That has not been substantiated.
" Mr.Naughton has taken our money apparently spent it and handed over our (deeds) chanotes to the bank!
"I handed over 95% of a requested 4.72 million baht.
. "At the moment the Pattaya Consumer Protection department are looking into the matter. I am told we will be kept informed. I was not satisfied that the DSI were dealing with the matter appropriately."
Britons Nick Green and Lee Booty have also made statements to this site and are dealing with Consumer Protection officers.
In all, it is estimated some 205 million baht (UK 4.5 million) was put into the project has disappeared.
Police may also have to look at claims that, with the cash obtained in deposits and full payments, the directors had hawked their portfolio around Europe attempting to get a further ÃƒÂ¢Ã¢â‚¬Å¡Ã‚Â¬10 million loan from banks there.
The plan failed, said Martin Simons, because when the banks looked at their supposed assets the figures did not add up.
Department of Special Investigation officers or Consumer Protection officers, who now seem the more likely investigators, will now have to consider whether there was a conspiracy from the very date the project was first offered to the public.
The involvement of Consumer Protection could be a positive move in a city which is trying to improve its image while remaining the favoured location for a wide range of foreign property scammers.
The victims are mainly Britons, but there are also Australians, Russians, and Canadians, and Fins.
The Presidency of the Jomtien-Pattaya Rotary Club (2010-2011) would have given Haughton an air of integrity.
But most buyers, mostly new to Pattaya, would not know that membership of these sort of organisations in Pattaya do not undergo any sort of integrity check.
Installation of a President. Spot the property tycoon
Like many people apparently re-inventing themselves in Pattaya, Richard Paul Haughton has little experience in the property trade. Nor is he a qualified accountant as he claims in publicity blurbs.
He has allegedly had elocution lessons to hone down a broad 'Jasper Carrott' Birmingham accent and one of his claims is that in one year he was the top 'Tupperware'* salesman in the West Midlands.
Self-promotion. Haughton laying it on
The Emerald Palace is not the only project of Haughton which is mired in controversy.
At Lake Villas, east of Pattaya, in what local foreigners call 'The Darkside', Haughton is accused of failing to deliver millions of baht in rents from foreigners who bought properties to let out in their absence.
Indeed it seemed Haughton very much needed an accountant judging by this slightly historical note to a former Chairman of the Lake Villas Committee.
This state of affairs is confirmed by Les Bonner, from Portsmouth, England, the Secretary of the Lake Villas Owners Association:
"It's a mess," he said. "Properties here are being let out and the owners abroad know nothing about it. One person arrived last week to find his house occupied. All the money is going into another new company Mr.Haughton has started up.
"He owes owners tens of thousand of pounds (sterling) in rental guarantees and still keeps staff on site in an office. They are the most volatile Thai ladies I have ever met. Obviously we do not want these people on site now.
Lake Villas: People buy and Haughton makes money on their rents without telling them - its alleged
"You'll need to be a patient man to listen to all the complaints. It should be a matter for the DSI too.
"A company has been formed for people to own their properties under but no accounts, which Haughton was responsible for, have been done in years. That makes them in danger of losing their properties."
From the UK Ramesh Lal, Chairman of the Lake Villa Owners Committe has confirmed these reports and has claimed that actions by the committee have been thwarted by Niels Colov, a Dane and another ex-President of the Jomtien-Pattaya Rotary Club, who had 'bought' two properties on the estate, and rented one out to Haughton's Thai mistress.
A more detailed statement is expected from the British investors resident in the UK early next week.
In addition two other estates in Pattaya, Foxlea 1, and Foxlea 2, run by Salisbury have also suffered setbacks with complaints of workmanship needing costly repairs, and rents owing to absentee landlords of 3.4 million baht.
Many landlords have apparently not been notifed their premises have been rented. While cash appears to be used for the 'bosses' sojourns on Pattaya's 'Darkside'. They appear now not confident appearing at major venues in the city itself. There has been speculation that Mr.Haughton may be relocating to Phuket.
The following companies are claimed by TPME to be part of the same group:
Thailand property media & exhibitions group co ltd
Thailand property media & exhibitions Co Ltd
Headland Holdings Co Ltd
Castle Rock Co Ltd
Newbright Holding Co Ltd
Snowdon Holdings Co Ltd
PVRM Co Ltd
Paradise Home Pattaya
These are the housing projects associated with TPME and its directors. One or two don't exist.
Lake Villas Pattaya
Foxlea 1 & 2
The Chase, Pattaya.
*Tupperware: A brand of home Storage containers sold by salesmen known as 'consultants'.
* The British passport actually is the property of Her Majesty the Queen. The British Embassy can re-issue a passport if they so desire (obtained from the UK via Hong Kong) They cannot however re-issue a visa.