COMMENT: The fall of the Emerald Development Group

Today is Mai Sawit Ketroj’s birthday. He’ll be spending it behind bars after being questioned by police about alleged fraud involving the Emerald Development Group.

In a packed media conference yesterday Tourist Police Deputy Commander Maj Gen Surachet Hakpan outlined the unravelling of the prominent Phuket property development company.

“The suspect admitted that he has a lack of financial resources and that the construction can’t commence. There are many other projects that might be in the same situation. There are more than 300 victims, most of them are foreigners. Embassies have been informed to warn their citizens about the situation. The cost of damages from this case is now estimated at a billion baht.”

Having known Khun Mai for four years I was aware he was a bit of a property ‘cowboy’, leaning on deposits as collateral to establish other properties and fund the growth of his Emerald Development Group. A prominent Phuket lawyer has described the scheme as a property ponzi scheme.

“Ponzi Scheme. A fraudulent investment operation where the operator provides fabricated reports and generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities or profit of financial trading.”

I was more naive figuring he probably had things ‘under control’. Anyway, property is not my expertise and he wasn’t advertising with my company.

Whether or not this case unravels as a ponzi scheme, calculated fraud or simply poor business is a matter for the Thai courts. In the meantime people are waking up today to the news that they may have lost their deposits and milestone payments for property developments that were never started.

One of the litigants contacted The Thaiger yesterday with this message…

“I told you and everyone that this was a billion baht fraud case. Fortunately persistence got this piece of s**t arrested. But I have no faith in Thailand doing the right thing.”

In other allegations from potential litigants….

“I have spoken to dozens of people, some even Thais living in Phuket, who have lost money, and are too poor or stupid to pursue this guy.”

“I gave Sawit Ketroj, Phuket Future Group, a subsidiary of Emerald, 20 million Thai baht. He said the purpose of that money was to purchase land and build my Jade D villa.”

“Land was never legally transferred to my wife, nor was anything built, causing multiple breaches of contract.”

“Sawit Ketroj borrowed 450 million Thai baht from a publicly traded Thai bank called **** to purchase the land he had already sold me.”

As of today, litigants have filed civil and criminal charges against Sawit Ketroj. Contractors have also filed criminal charges against him for default on payments. And now the Thai Government have filed fraud charges against him with the police investigation ongoing.

Under an increasingly regulated market the fall of the Emerald Development Group, and it’s smiling CEO Mai Sawit Ketroj, is a bitter pill to swallow. The vast majority of local property developers are good, honest people who are building some great new properties for the island.

For Khun Mai it won’t be much of a birthday and 300 (we predict many more) litigants won’t be sending birthday cards.