Airports Of Thailand To Sue King Power Duty Free

[sriracha john]

SUVARNABHUMI DUTY FREE OPERATOR TARGETED

AoT board to sue King Power

The board of Airports of Thailand Plc (AoT) is preparing to file a lawsuit with the Administrative Court to seek a court order to scrap the commercial development contract of King Power International Group at Suvarnabhumi airport. AoT board member and spokesman Chirmsak Pinthong said after yesterday's board meeting that King Power was found to have violated and evaded the law governing private participation in state projects in its bid to win the right to carry out commercial development of the airport's passenger terminal. Mr Chirmsak said there was a scheme that purportedly put King Power's investment at Suvarnabhumi at less than one billion baht in order to evade a long selection procedure. The AoT board also found that King Power has occupied more space than it was contractually allowed. The firm's excessive commercial development inside the terminal is blocking direction signs and fire escapes. The offense could justify termination of its contract, he said. Also, King Power built a two-storey restaurant named Garden City adjacent to the domestic wing of the terminal although the contract did not permit such construction, said Mr Chirmsak.

Continued here:

http://www.bangkokpost.com/News/23Feb2007_news08.php

[HarryHacker]

Should be interesting, KP was always rumoured to be untouchable because of various connections.

[sriracha john]

King Power insists it abides by rules of laws

King Power International Group has insisted it did not break the public/private joint venture law after being awarded the City Garden project concession at Suvarnabhumi Airport, a company source said Friday.

The source said it was the Airports of Thailand's previous board of directors who had awarded the contract without first obtaining Cabinet approval, even though the concession was worth more than Bt1 billion.

"If we are to demolish the construction, AOT will have to pay us Bt300 million," the source said.

The Nation

[sriracha john]

UPDATE.... and it's adios

King Power: Out by Dec 11

King Power Duty Free will be given 60 days starting Friday to remove its duty-free outlets from Suvarnabhumi, Chiang Mai, Phuket and Hat Yai airports, the Airports of Thailand (AoT) board decided yesterday. Spokesman Chirmsak Pinthong said the 60 days will be counted from the day the company receives official advice of the decision. The letter will be sent today, he said. The company has 15 days in which it can appeal. The action follows the AoT board's ruling that the decision by the previous board on April 2, 2004, to award the firm the contract was void because of the lack of transparency.

Continued here:

http://www.bangkokpost.com/topstories/tops...s.php?id=122564

Edited October 11, 2007 by sriracha john

[cclub75]

King Power Duty Free will be given 60 days starting Friday to remove its duty-free outlets from Suvarnabhumi, Chiang Mai, Phuket and Hat Yai airports, the Airports of Thailand (AoT) board decided yesterday.

I still can't believe it.

King Power can... launch an appeal. And furthermore, not a word... on who could replace King Power !

It's surreal.

To find another operator for the commercial space in Suva is going to take time, with proper procedures. So ?

Can we believe that... Suva is going to be cleared of all shops ?

[nothingleftbutfaith]

King Power Duty Free will be given 60 days starting Friday to remove its duty-free outlets from Suvarnabhumi, Chiang Mai, Phuket and Hat Yai airports, the Airports of Thailand (AoT) board decided yesterday.

I still can't believe it.

King Power can... launch an appeal. And furthermore, not a word... on who could replace King Power !

It's surreal.

To find another operator for the commercial space in Suva is going to take time, with proper procedures. So ?

Can we believe that... Suva is going to be cleared of all shops ?

Of course not .

Too much at stake here.

[onzestan]

King Power Duty Free will be given 60 days starting Friday to remove its duty-free outlets from Suvarnabhumi, Chiang Mai, Phuket and Hat Yai airports, the Airports of Thailand (AoT) board decided yesterday.

I still can't believe it.

King Power can... launch an appeal. And furthermore, not a word... on who could replace King Power !

It's surreal.

To find another operator for the commercial space in Suva is going to take time, with proper procedures. So ?

Can we believe that... Suva is going to be cleared of all shops ?

They probable have already someone in line to pay bakshish to the current administration.

cheers

onzestan

[stoneman]

Another possibility is that the current administration never got any "Tea" money from King Power and they are going to put pressure on King Power to get their share...and then business as usual can resume..

[sbk]

Forbes did an interesting article on King Power and its founder, Vichai Raksriaksorn,

The Kingdom and the Power

Suzy Nam 10.30.06

pic

Thaksin's gone, but the new airport he left behind is big business for Vichai Raksriaksorn.

Bangkok's new Suvarnabhumi Airport is a stunning $4 billion steel-and-glass project that opened for international operations on the heels of the coup that removed its biggest promoter, Prime Minister Thaksin Shinawatra. Its passenger capacity of 45 million annually is one of the world's largest.

But with retail operations the size of three football pitches, it's also home to one of the most potentially lucrative commercial complexes. And one man, Vichai Raksriaksorn, founder and CEO of King Power, reigns over all of that business.

Vichai has high expectations, and Thailand does, too. Airports used to make the lion's share of their money on landing fees and passenger taxes, but these days the money they earn from perfume, cappuccino and whiskey sales is becoming the biggest revenue generator.

King Power, named for the country's revered King Bhumibol Adulyadej and long Thailand's leading duty-free operator, is spending a minimum of $73 million a year plus up to 15% sales revenues on a concession to handle every aspect of the new airport's nonaviation commercial operations, including food, beverages, entertainment and, of course, shopping.

"No other single company in the world is doing this," says the 48-year-old boss. His competitors for the concession, including the country's top food, retail and hotel conglomerate, Central Group, reportedly have complained about the bidding process. But Vichai says King Power was the natural choice: "Our bid was higher, and we've been in this business for 18 years."

King Power once was a public company listed on the American Stock Exchange, with operations in Hong Kong, Macau, Singapore and Cambodia. Vichai and other Thai shareholders fought a two-year legal battle and spent $9.2 million to buy back 11% of the company from other shareholders and take it private in 2003.

Vichai also began winding down King Power's international operations. "We found that we didn't have enough manpower, and if we wanted to do this project, we had to make some decisions. If we continued our overseas operations, we could not do this," he says.

Experience aside, even Vichai seems a little surprised by the magnitude of his task at Suvarnabhumi. Nowadays he's one of the wealthiest men in the country (No. 24 on our recent Thai 40 Richest list) and, since he took up polo eight years ago, has been found on the field playing with the likes of Prince Charles and top-ranked Adolfo Cambiaso. But 20 years ago he was running a small luxury-goods importer.

Back then Thai Airways, the country's flagship carrier, was in charge of the duty-free operations at Bangkok's old Don Muang International. Vichai started talking to duty-free companies on buying trips abroad and thought he could do a better job. His mantra: "Thai Airways should fly airplanes, not manage retail operations."

He partnered up with a group from Hong Kong, bought a concession to sell duty-free goods and a few years later opened up his first duty-free stores in Thailand, taking just 6,000 square feet of space.

At Suvarnabhumi ("golden land") his kingdom has grown to about 290,000 square feet, which includes King Power duty-free shops (75,000 square feet) and retail space for international and domestic brands such as Chanel, Louis Vuitton and luxury Thai silk manufacturer Jim Thompson. It also has a spa, a day hotel, a business center and, of course, karaoke.

King Power estimates it will pull in about $525 million during the first full year of operations at Suvarnabhumi, with profits of $25 million. Those figures include sales from duty- and tax-free stores in three other airports in the country and the duty-free shopping complex in the middle of Bangkok being constructed as a complement to the new airport space (where, without an impending flight or carry-on baggage, shoppers can spend more relaxed time buying duty-free goods, which King Power will have waiting for them at check-in). Last year revenues were $300 million and net profits at just under $20 million.

Duty-free sales are still the closely held company's main profit center, but Vichai says his managing all of Suvarnabhumi's commercial activities is a boon for all concerned.

The food, the shopping, the business center--even the impressive 70-foot sculpture depicting a story from Thai mythology that Vichai commissioned as the centerpiece to the international terminal--will help build Suvarnabhumi into a destination airport, the transit hub of choice for far-flung passengers. "We have control over the whole experience," he brags.

A frequent traveler with a second home in London, Vichai passes time in foreign airports observing how they've set up their commercial space and how passengers respond. One of his favorites is Dubai's, which he says looks more like a shopping mall. At another, Seoul's Incheon International Airport, passengers spend an average of $60 apiece as part of their "airport experience," the highest amount in the world.

At Don Muang Airport passengers spent an average of only $25 last year. To try to reach Seoul's numbers, King Power hired airport retail consultants and conducted surveys of passenger behavior. What it learned: People are often afraid to stray too far from departure gates for fear they'll miss their flights, so shops have to be nearby. Travelers also need to be reminded to spend their money, so the shopping has to be prominent.

Suvarnabhumi's international terminal is one long strip with retail outlets distributed throughout, and passengers leaving passport control emerge into the center of a kilometer-long stretch of duty-free shopping. Woe to the hurried flier who just wants to get to the gate.

Along this retail gauntlet of cosmetics, alcoholic beverages and designer handbags, storefronts curve in and out of the concourse, and merchandise seems to spill out, as at no other airport.

Vichai says 60% of passengers will probably spend money in an airport regardless of the environment, another 30% need coaxing. "We've thought about how we can change their attitudes," he says. The rest he's willing to entertain free with the $1.3 million centerpiece sculpture and other art.

Airports of Thailand expects at least half its revenues will come from nonaviation activities by next year, and even more in the future. Nevertheless, fliers leaving Thailand will notice the nation's departure tax rising to 700 baht ($19) from 500 baht in February 2007, to help pay for Suvarnabhumi.

Once the new airport is running smoothly, Vichai pledges, he and his wife, Aimon (King Power's CFO), will retire from the day-to-day management and "just be good shareholders."

Awaiting him are more than 100 polo ponies in Thailand and the U.K., Vichai says. "I told myself I would retire at 50. I can buy anything I want already; I want to enjoy living."

By the Numbers

Perfume, cappuccino, cigarettes and whiskey fill airports with the sweet smell of profits.

$9 bil Worldwide airport retail sales in 1996.

$14 bil Sales in 2005.

40% Nonaviation revenue share at Thai airports.

Sources: Generation DataBank; King Power.

members.forbes.com/global/2006/1030/020.html

[sbk]

K Vichai, btw, is the 21st richest person in Thailand

[pete_r]

Another possibility is that the current administration never got any "Tea" money from King Power and they are going to put pressure on King Power to get their share...and then business as usual can resume..

Seconded. Looks like someone is flexing muscles to extract money out of King power.

I don't see KP kicked out without years of legal battle anyway.

[onethailand]

Thanks for posting the article, SBK.

It has been rumored that the tenants that are already there under King Power's contract will be allowed to negotiate with the new operator to keep their existing space - so only the duty-free areas will probably be removed at first.

Can you imagine everyone having to shut down, then basically go through construction again?

[sriracha john]

King Power defies order to move outlets from airports

King Power International Group is defying the order of Airports of Thailand (AoT) for it to remove all duty-free outlets from Suvarnabhumi, Chiang Mai, Phuket and Hat Yai airports in 60 days. Group deputy chairman Chulchit Bunyaketu said yesterday there would be no relocation and the AoT board, which gave the order on Thursday, should be aware that it should not make any movement now that the dispute between the two parties was in the courts. ''In the future, if King Power is to remove any outlets, that will mean that the lawsuits must have already been finalised and King Power is the loser. In the next 60 days, if any party happens to remove the outlets, King Power must seek court protection,'' he said.

The AoT board on Thursday confirmed its previous decision that King Power had acquired the rights illegitimately to extend its duty-free shop contract for the airports.

Continued here:

http://www.bangkokpost.com/News/13Oct2007_news06.php

[sriracha john]

UPDATE

AIRPORT SCANDAL

Round 1 to King Power

Civil court takes up lawsuit against AOT

King Power International yesterday won a battle in its ongoing wrangle with Airports of Thailand (AOT), as the Civil Court agreed to take up its lawsuit against the agency.

In response to the AOT's claim that the case should be forwarded to the Administrative Court, the Civil Court ruled that, based on discussions with the Administrative Court, the case concerns a commercial contract and not a government contract.

King Power filed the civil suit in retaliation against AOT's decision to terminate the contracts to run the duty-free shops and commercial areas at Suvarnabhumi Airport. It claimed damages of 68 Billion Baht.

The court ordered both parties to work out a scheme to allow King Power to continue its business while the trial takes place. On January 31, they are required to notify the Civil Court whether they have been able to agree terms.

AOT earlier instructed King Power to remove its properties and leave Suvarnabhumi by the end of this year. However, due to yesterday's court order, this deadline no longer needs to be met.

It was reported that a public prosecutor representing AOT would seek a meeting on the case with Air Marshal Chana U-sathaporn, the newly appointed president of AOT, on January 4.

At the same time, King Power's representative will negotiate with Chana on four issues.

"King Power wants assurances that it could continue decorating shops in the commercial areas, which it has rented out.

"King Power also wants permanent key cards for its officers for entry into the passenger terminal, as since the termination [of the contract] its officers are issued only temporary cards which come with time restrictions," said a source.

The source added that in return, King Power was ready to return some commercial space to AOT for the construction of additional toilets. Moreover, it is open to negotiation on the modification of space for fire exits.

King Power is the exclusive operator of the lucrative duty-free shops at Suvarnabhumi. AOT nullified the duty-free contract on grounds that the company had violated the Public/Private Joint Venture Act. It also terminated the contract for King Power to manage more than 20,000 square metres of commercial space at the passenger terminal.

While the case is in court, all revenue from King Power is parked at the Civil Court. Due to the controversy, AOT's net profit dropped 90 per cent to Bt1.1 billion from Bt10.4 billion last year.

- The Nation

[siam2007]

now as the corrupt old clique led by Zombie Samak won the election, there is doubt that KING POWER will soon be able to do business as usual again and maybe even sign a new contract

....

[dr_Pat_Pong]

now as the corrupt old clique led by Zombie Samak won the election, there is doubt that KING POWER will soon be able to do business as usual again and maybe even sign a new contract

....

Would he be that stupid ?

[Crushdepth]

Would he be that stupid ?

Yes. And he would, in all probability, get away with it too.

[sriracha john]

AoT softens its stand against King Power

The Airports of Thailand (AoT) will work out a compromise with the King Power International Group whose duty-free outlets are facing eviction from Suvarnabhumi airport over the alleged lack of contract transparency. AoT president Chana U-sathaporn said the AoT yesterday consulted a prosecutor representing the AoT on legal matters following the Administrative Court's ruling on Dec 28 that the case against King Power should be heard in the Civil Court because it involves civil offences. The court said the AoT and King Power, which is seeking court protection against eviction by the AoT, should hold talks for an out-of-court settlement to their dispute and inform the judge of the outcome of talks at the end of the month. Chana said a compromise would be worked out pertaining to the use of commercial areas at Suvarnabhumi airport. Under a new deal, it is highly likely the AoT would gain the right to be informed of the revenue earned by King Power from operating the duty-free shops and commercial areas at the airport during the previous two years, said the AoT president. The revenue in question is believed to be about 6-7 billion baht. King Power had earlier filed a civil suit in retaliation for the AoT's decision to terminate the contracts to run the duty-free shops and commercial areas at Suvarnabhumi airport. It claimed to have suffered damages of 68 billion baht. The King Power contracts ran into problems early last year after the board accused the firm of violating the Public-Private Joint Venture Act.

Continued here:

http://www.bangkokpost.net/News/05Jan2008_news16.php

[sriracha john]

Seems to be going in the other direction now from the last post....

AOT to take legal action against defiant King Power

Airports of Thailand (AOT) has resolved to take legal action against King Power Interna-tional Group, the operator of duty-free shops, for failing to remove its outlets from Suvarnabhumi Airport, board member Chirmsak Pinthong said yesterday.

The AOT executive board also decided to sell AOT's stake in Thai Airports Ground Ser-vices (TAGS), which handles ground services at the airport.

It will also examine a contract that employs TAGS to manage the airport's duty-free zone, to see whether it is paying too much.

AOT pays TAGS Bt21 million a year to manage the zone, based on a 16.5-per-cent management charge.

The board views the payment as unfair and is ordering AOT to sell its 18-per-cent stake in TAGS to create transparency after an examination of the contract is carried out.

The board's decision on King Power came after its instruction to the company to remove its shops in March last year appears to have been ignored.

King Power's failure to comply prompted AOT's board on Tuesday to engage lawyers to take action against it.

The board also yesterday ordered King Power Suvarnabhumi, a subsidiary of King power, to remove its tenants at the airport. The subsidiary manages commercial space at the airport.

The firm, which sublets space, was told that the concessions granted in March 2006 by the former AOT board had violated the Public-Private Joint Venture Act. This omission was deemed as sufficient reason to withdraw the concessions.

The board said some key information had not been disclosed when the concession was granted by the former board.

The current board has asked the National Counter Corruption Commission to investigate whether there are any officials or people involved in the failure to disclose this information, as required under the Public-Private Joint Venture Act.

The commission has been asked to take disciplinary action and file civil cases against people who violated the act.

The concession was granted during the Thai Rak Thai-led government two years ago.

Yesterday's legal move by the AOT came as a surprise. It was expected that the board would leave the matter to the new government to tackle.

Some industry sources had expected the issue would be settled out-of-court as the People Power Party, consisting of ex-Thai Rak Thai Party members, is expected to play a key role in the new government.

Chirmsak, however, said it had decided to take legal action fearing the statute of limitations would render the case void when it ends this March, one year after the board's order to oust the company from the airport was issued.

Earlier on, King Power filed a counter-lawsuit against the AOT board, seeking damages worth Bt68 billion for withdrawing its concessions.

The AOT board took the latest move after recommendations were made by a fact-finding committee led by former senator Prathin Santiprapob.

- The Nation

[sriracha john]

SUVARNABHUMI / LEGAL DISPUTE

AoT to evict King Power from airport after contract breaches

Airports of Thailand (AoT) will take legal action to evict King Power from the commercial space it occupies at Suvarnabhumi airport

AoT Board spokesman Chirmsak Pinthong said the board's investigation committee headed by former National Police Chief Pol Gen Pratin Santiprabhob had confirmed that King Power Suvarnabhumi Co, a firm under King Power International Group, had acquired the commercial space contract from AoT without undergoing scrutiny required under the Public-Private Joint Venture Act. The law requires in-depth scrutiny of every state project worth a billion baht or more. King Power Suvarnabhumi operates other commercial areas at the new airport, while King Power Duty Free Co runs the duty-free shops. The AoT committee alleged King Power Suvarnabhumi had concealed information to keep the official investment of the commercial space development below one billion baht, to avoid scrutiny under the Public-Private Joint Venture Act law. The AoT Board reached the resolution in its meeting in Chiang Rai on Tuesday. Mr Chirmsak said the AoT would talk to the Office of the Attorney-General about the possibility of evicting King Power from Suvarnabhumi airport. King Power Duty Free would also be evicted. The AoT board has accused it of acquiring its duty-free shops contract by evading the joint venture law in a similar fashion.

Continued here:

http://www.bangkokpost.com/News/10Jan2008_news12.php

[sriracha john]

Six groups to blame for King Power contract

AoT investigation uncovers irregularities

Airports of Thailand's (AoT) investigation committee has found six groups of people were involved in irregularities in the awarding of a contract to King Power Suvarnabhumi Co to run commercial space at Suvarnabhumi airport. The investigation team has confirmed that King Power Suvarnabhumi, a firm under King Power International Group, acquired the commercial space contract from AoT without undergoing scrutiny required under the Public-Private Joint Venture Act. The law requires in-depth scrutiny of every state project worth one billion baht or more. AoT Board spokesman Chirmsak Pinthong said AoT will inform the company in writing that the contract is invalid. AoT will then proceed to petition the Attorney-General to evict the company from the commercial space it occupies at Suvarnabhumi. King Power Suvarnabhumi operates commercial areas at the new airport, while King Power Duty Free Co runs the duty-free shops.

The investigation team, headed by former National Police Chief Pol Gen Pratin Santiprabhob, has named in its report six groups of people allegedly involved in the contract irregularities. The first group was the previous AoT Board, which awarded the contract to the company, allegedly breaching the joint venture law. The second was the Board's sub-committee to run and develop general affairs in the airport. The investigation team accused the sub-committee of acting beyond its authority by allowing the company to build the City Garden building outside the airport's passenger terminal, which is not stated in the terms of reference. The third was the AoT's revenue-handling committee, which is accused of negligence after allowing the company to make use of more space than indicated in the contract. It did not try to charge the company for using the extra area. The fourth group included the committee which received the bids for the contract and the committee which selected the bidders. The investigation panel said the company's bidding document had been tampered in a way that put AoT at a disadvantage. Also, nobody in the two committees could say where the missing important documents were being kept, the investigation team said. The fifth group was King Power Suvarnabhumi and its management. The AoT investigation alleged King Power Suvarnabhumi had concealed information to keep the official investment of

Continued here:

http://www.bangkokpost.net/News/14Jan2008_news08.php

[PadThaiGuy]

I said it before. This airport needs outside help managing the operations.

The Thais are so corrupt, that nothing can/will be done.

Sombody with integrity, morals and a professional attitude needs to take over.

Of course the Thai Mafia types won't let that happen.

[sriracha john]

LEGAL DISPUTE AIRPORT DUTY-FREE SHOPS

King Power back in business

The Civil Court has ordered Airports of Thailand (AoT) to let King Power International Group resume business at Suvarnabhumi pending a decision on their dispute. AoT earlier cancelled its contracts with King Power, the operator of duty-free shops and commercial areas at the airport, for alleged irregularities in the contracting process. The firm filed a counter lawsuit with the Civil Court and sought damages of 68 billion baht. The court's injunction, issued on Wednesday and released yesterday, said the firm must be allowed to operate until a ruling is made in their dispute. It also prohibited AoT and its executives from giving press interviews that might affect King Power's operations. AoT has ordered King Power's eviction from duty-free outlets and commercial shopping space at the airport. The contracts ran into problems early last year after the AoT board accused King Power of breaching the public-private joint venture law.

It said King Power had concealed information to keep the official investment in each of its two commercial developments at the airport under one billion baht to avoid proper scrutiny. The court also instructed King Power to pay about three billion baht to the AoT, which has not received any revenue from the company since the airport opened.

Continued here:

http://www.bangkokpost.net/News/01Feb2008_news02.php

[Ricardo]

Wow, three billion baht unpaid, that would certainly buy a lot of light-bulbs for the taxi-ways !

Wonder what rate-of-interest, on late-payments of rent or other fees, King Power are required to pay AOT in-compensation ?

[sriracha john]

AoT pursuing King Power

The construction of a two-storey building as an annex to the passenger terminal of Suvarnabhumi airport by King Power Suvarnabhumi Co could be illegal, according to an Airports of Thailand (AoT) inquiry committee. An AoT source, the committee headed by former national police chief Pol Gen Pratin Santiprabhob will officially report its findings to the AoT board today. The investigation focuses on the City Garden building that King Power Suvarnabhumi Co, a subsidiary of King Power International Group, built at the international airport. The first storey functions as the airport offices of the company and the second floor was developed into a restaurant connected to concourses A and D of the passenger terminal. On March 15, 2005, AoT allowed the company to develop commercial space in the airport terminal but the original agreement did not include the City Garden building. The committee also found that development had damaged AoT's interests as the company offered nothing to AoT in exchange for constructing the additional building.The City Garden building was also built in an area where AoT plans to expand the airport's passenger lounge in 2010, the source said, adding that King Power did not seek a construction licence for the building. The source said the building also posed security concerns because people could reach the airport concourses through the building without passing immigration and customs checks.

Continued here:

http://www.bangkokpost.net/News/07Feb2008_news06.php

[sriracha john]

King Power building faces closure

The Airports of Thailand (AoT) board has ordered the AoT management to close a two-storey office building belonging to King Power Suvarnabhumi Co for occupying the space illegally. The AoT board met yesterday and resolved that AoT management must close the King Power office building at once because it was built in the compound of Suvarnabhumi airport without proper permission. The first floor of the building named City Garden functions as the King Power office and the second floor was leased out and developed as a restaurant. AoT board spokesman Chirmsak Pinthong said King Power had sought permission to construct the building from a subcommittee appointed by the previous AoT board, which was not authorised to grant permission. In this case, King Power was considered to be trespassing on the airport, said Mr Chirmsak.

Continued here:

http://www.bangkokpost.net/News/08Feb2008_news08.php

[sriracha john]

UPDATE... seems with the new government, that things are magically going the other way for King Power...

New AoT to review City Garden dispute

King Power building might not be illegal

A disputed office building owned by King Power Suvarnabhumi Co may not have been illegally built as its design plan was originally incorporated into the blueprint for the airport's passenger terminal, an AoT source said yesterday. The dispute was recently taken up for discussion by related agencies, which suggested the building could be legal after all. The opinion contradicted the findings of an inquiry appointed by the previous AoT board, which found that the City Garden building built by King Power Suvarnabhumi, a subsidiary of King Power International Group, was illegal. The first floor of the building, named City Garden, functions as the King Power office and the second floor was leased out and houses a restaurant. An inquiry panel headed by former national police chief Pol Gen Pratin Santiprabhob earlier reported that City Garden was built without proper permission. King Power had sought permission to construct the building from a subcommittee of the AoT board that was not authorised to grant permission. Approval for construction should have been the decision of

Continued here:

http://www.bangkokpost.com/News/24Mar2008_news09.php

Edited March 24, 2008 by sriracha john

[sriracha john]

King Power awaits crucial decision in AOT court case

King Power Group of Companies is awaiting a crucial court decision, due tomorrow, which will have a strong bearing on its multibillion-baht duty-free and commercial retailing business at Suvarnabhumi Airport.

The conglomerate, which also operates a city duty-free shopping and entertainment complex and a hotel, acquired a court injunction last November when the previous board of Airports of Thailand (AOT) resolved to terminate its contracts.

The contracts cover 9,000 square metres of duty-free retail space and another 21,000 square metres of commercial space at Suvarnabhumi.

King Power executives said they were treated unfairly by the previous AOT board, which was installed following the September 2006 coup.

King Power Chairman Vichai Raksi-arksorn said the outlook had become better since the Samak Sundaravej government came into office and a new AOT board was appointed recently.

"We're returning to plan our business for the third and fourth quarters of this year," he said. "Previously, it was not possible as we were prohibited from doing anything to promote sales. Given the fact that we have a new government, we hope to gear up our international sales and marketing campaign to reach this year's target of Bt20 billion in sales. The first quarter was on target with sales of about Bt5 billion. The second and third quarters will see lower sales, but the fourth quarter should see a big improvement."

In 2007, King Power's duty-free sales at Suvarnabhumi Airport amounted to Bt12.7 billion.

Besides the legal protection sought after the cancellation of its contracts, King Power filed a lawsuit against AOT seeking compensation of Bt67 billion or else the AOT is required to abide by the contracts which King Power said were signed properly.

At this stage, Vichai hopes the new board of AOT, which is listed on the stock market, will turn to negotiate with King Power and settle the dispute.

Under the terms of two 10-year-long contracts, awarded in 2006 during the tenure of the Thaksin Shinawatra government, King Power is required to pay AOT a 15-per-cent share of its sales revenue - or a minimum of Bt1.4 billion per year.

With duty-free sales totalling Bt12.7 billion, Suvarnabhumi is ranked 11th in the world based on 2006 figures and including Don Mueang Airport operations that year. London Heathrow in the United Kingdom is top, followed by Seoul-Incheon in South Korea, Dubai in the United Arab Emirates and Changi in Singapore. Hong Kong International ranks 10th.

- The Nation (today)

[brahmburgers]

King Power Duty Free will be given 60 days starting Friday to remove its duty-free outlets from Suvarnabhumi, Chiang Mai, Phuket and Hat Yai airports, the Airports of Thailand (AoT) board decided yesterday.

I still can't believe it.

King Power can... launch an appeal. And furthermore, not a word... on who could replace King Power !

It's surreal.

To find another operator for the commercial space in Suva is going to take time, with proper procedures. So ?

Can we believe that... Suva is going to be cleared of all shops ?

King Power can go. Bye Bye. What I'd like to see at the Bkk's BullySwampi airport:

taco bell

big thrift store selling lots of 2nd hand stuff for low prices,

another outlet selling confiscated stuff, including liquids.

comfy lounge chairs

play area for kids

free internet, free magazines

free shuttles back & forth to Don Muang

a new security detail that had the cojones to bust nimble fingered baggage handlers

a free craft center, where anyone can make baskets, clay pots, folded paper thingies

an exercise area for stretching

an easy way to report suspect officials, such as the type who scam weary travelers

...but that's just me,

[sriracha john]

UPDATE... they're coughing up some money...

King Power to pay AOT 700 Million Baht more

King Power International has agreed to pay an additional 700 Million Baht a year to Airports of Thailand (AOT), in an effort to settle its legal disputes with the Suvarnabhumi Airport operator, an AOT source said.

"King Power's offer will end the conflict between the two parties," said the source, who did not want to be named.

King Power holds a 10-year concession from AOT to operate duty-free shops and manage commercial retail space at Suvarnabhumi Airport. The original terms called for commercial space to be limited to 20,000 square metres across clearly stipulated locations.

Under the concession, King Power is obligated to pay 1.2 Billion Baht in the first year for its duty-free space and another 1.43 Billion Baht for commercial space. Payments for subsequent years are based on 15 per cent of sales revenue, with a minimum of 1.4 Billion Baht.

Serirat Prasutanond, acting President of AOT, did not confirm the additional figure, but said the board would be asked to approve the agreement so that AOT could book the revenue in the 2008 fiscal year, which ends in September. He is positive that if things go as planned, AOT's financial results would sharply increase from last year when net profit was 1.09 Billion Baht.

In the third quarter from April to June, AOT's net profit jumped 1,000 per cent to 3.6 Billion Baht from 330 Million Baht in the same period last year due to the realisation of King Power's concession fees of 3.8 Billion Baht.

The previous board of directors, chaired by General Saprang Kalayanamitr, was at odds with King Power. The board in March last year decided to cancel the two contracts with King Power, citing they were signed during the Thaksin government, in violation of the Public/Private Joint Venture Act. It also evicted King Power from the airport.

King Power retaliated, by filing civil lawsuits against AOT, seeking compensation of nearly 70 Billion Baht. The Civil Court issued an injunction for King Power to continue its business at the airport.

Sources at AOT said the new board, chaired by Vudhibhandhu Vichairatana, which took over following the formation of the People Power Party-led coalition government, had decided to reach a negotiated settlement with King Power.

A source at King Power said if AOT agrees to let the contracts continue, it will withdraw its lawsuits.

- The Nation / August 18, 2008