Cnn Bill Thailand Elite B140m

[Highwayman]

CNN's B140m bill triggers Elite probe

Major contracts signed without authorisation

The global news service CNN has submitted a 140-million-baht bill to Thailand Privilege Card Co for advertising, prompting an investigation into how the state-owned company has run up such high marketing expenses with questionable internal controls. In announcing the investigation, state officials said there were instances where spending approvals reportedly were not signed by any authorised parties at the state-owned company.

Thailand Privilege Card currently owes a total of 200 million baht to CNN, ad agencies and other media outlets.

The company was established to promote the one-million-baht Thailand Elite Cards, a loyalty programme aimed at wealthy foreign executives and tourists and offering special privileges ranging from fast-track immigration procedures to discounts at golf courses and hotels.

Somchainuk Engtrakul, the chairman of Thailand Privilege Card and permanent secretary to the Finance Ministry, said that his deputy, Boonsak Jiampreecha, would investigate the circumstances regarding the CNN advertising bill.

Mr Boonsak is also on the audit committee of Thailand Privilege Card.

Mr Somchainuk stressed that the company had no financial difficulty in meeting its commitments, considering that with 660 cards sold to date, it effectively had funds of 660 million baht in hand. :D

"What I am going to do is investigate details of what has happened. The Elite Card should not have incurred such huge foreign advertising costs,'' he said. "It's not the money. The money we'll have to pay.'' Mr Somchainuk said an invoice submitted to Thailand Privilege Card did not stipulate who had authorised the commercial spots, resulting in a reluctance by officials to pay the bill. "As a result, CNN submitted a letter directly to Tourism and Sports Minister Sonthaya Khunpluem asking for the payment,'' he said.

Board members, as well as Mr Sonthaya, noted discrepancies in how ad bookings were handled by Thailand Privilege Card. Some invoices clearly showed the official who had authorised the ads while others did not. Members of the audit committee plan to investigate why some ads were run even without explicit written authorisation, as well as why, if airtime had been purchased, no company official had signed to take responsibility.

They also want to know why CNN chose to run the commercials if the contracts were incomplete since they lacked official authorisation.

Mr Boonsak said he would submit his report by next Wednesday.

He said the 140-million-baht bill was not for CNN only, but also for advertising in other media within the Time Warner group, including Fortune and Time magazines. Other bills were outstanding to a number of publications in Japan, as well as 50 million baht owed to various agencies for production costs of the various advertisements.

Officials said most of the expenses had been incurred last year at the onset of the Elite Card project. At the time the advertisements were purchased, Juthamas Siriwan, the governor of the Tourism Authority of Thailand, was the TPC chairwoman and Paisith Kaenchan was acting managing director. Both have since resigned. Both Mrs Juthamas and Mr Paisith have said that the international media buying had been done in a hurry to meet tight schedules around the launch of the card. Chotsiri Rodboonpa, the current TPC managing director, acknowledged that it was unusual for advertising to have been purchased without proper documentation.

The Elite Card project, the brainchild of Prime Minister Thaksin Shinawatra, was launched in 2003 as part of an initiative to develop the country's tourism sector.

But the project has fallen considerably short of its original target of one million cardmembers within five years. Officials recently revised the 2004 sales target to 3,000-5,000 members.

Bangkok Post 15.09.2004

[p_brownstone]

It was only a matter of time before the wheels fell off this idiotic idea.

The only income the Company has is the one time Fee per Card, as they claim a total of 660 million to date - assuming that they have all been paid for of course, many were certainly given away for free. Deduct the debts to CNN, overheads for the Company including salaries and the substantial cost of the various overseas "Sales Promotion" junkets, 5 Mercedes Benz allegedly purchased to ferry Cardholders to and from the Airport etc. etc..

Another total fiasco launched by the "CEO" who believes his own PR that he is a sucessful businessman.

[DJ Pat]

It was only a matter of time before the wheels fell off this idiotic idea.

You took the words right out of my mouth.

[ovenman]

The global news service CNN has submitted a 140-million-baht bill    to Thailand Privilege Card Co for advertising, prompting an investigation into how the state-owned company has run up such high marketing expenses with questionable internal controls.

I suppose that since CNN is not allowed pass-through advertising in Thailand via UBC, the powers-that-be could simply deny that this advertising even aired.

They also want to know why CNN chose to run the commercials if the contracts were incomplete since they lacked official authorisation

See, this was actually all CNN's fault.

[p_brownstone]

Most of the advertising was a large Banner Ad. at the top of the CNN Webpage - and it was there for a couple of months at least.

[mouse]

Mr Somchainuk stressed that the company had no financial difficulty in meeting its commitments, considering that with 660 cards sold to date, it effectively had funds of 660 million baht in hand.

So you are telling me, they got the three Mercedes, Golf Courses and other company assetts for free, not to mention that the Staff and Management have obviously been working for free in the building that they rent for free ?????

[Up2U]

Mr Somchainuk stressed that the company had no financial difficulty in meeting its commitments, considering that with 660 cards sold to date, it effectively had funds of 660 million baht in hand.

So you are telling me, they got the three Mercedes, Golf Courses and other company assetts for free, not to mention that the Staff and Management have obviously been working for free in the building that they rent for free ?????

Have you ever tried to sort out a Thai accounting 'system'?

I am very experienced in reviewing / auditing project accounts throughout the world. have been doing it for thirty-plus years. But the way the accounts of my current project are presented defies belief. Simple statements of figures, with no back-up. And I am 'being difficult' when I ask our Thai partner for evidence of money spent. My German bosses have told me not to dig into any accounts here in LOS, but to leave them to the Thais - who will 'sort it out' soon.

I doubt it, but I am keeping away now, 'cos I don't want to go to jail.

[Highwayman]

Somchainuk Engtrakul, the chairman of Thailand Privilege Card and permanent secretary to the Finance Ministry, said that his deputy, Boonsak Jiampreecha, would investigate the circumstances regarding the CNN advertising bill. Mr Boonsak is also on the audit committee of Thailand Privilege Card.

Is this not a major conflict of interest or is it considered normal practice for Thailand?

[ovenman]

Is this not a major conflict of interest or is it considered normal practice for Thailand? 

It would probably be stranger were there not such a conflict-of-interest associated with a project of this nature in Thailand.