California Wow Allegedly Siphoned Bt1.6 Billion Overseas

[webfact]

California Wow allegedly siphoned Bt1.6 billion overseas
By English News



BANGKOK, June 7 – California Wow, a major Thai market fitness chain which shut down last year, was found to have transferred Bt1.6 billion overseas during its operations here, the Anti-Money Laundering Office (AMLO) announced today.

AMLO secretary general Sihanart Prayoonrat said California Wow Xperience, listed in the Securities Exchange of Thailand in 2006, reported a profitable operation only in the first year as a public company and losses every year from 2007 to 2013.

The company had, however, wired money overseas every year with the highest volume at over Bt495 million in 2010, or more than 1.6 billion in a decade.

Pol Col Sihanart Prayoonrat said the peak of financial outflows were in 2009-2011 when California Wow sent its money out of Thailand via Swift code, adding that a preliminary investigation found 10 people implicated in the scandal.

The closure of the fitness outlet last year affected shareholders and more than 1,000 members. (MCOT online news)


-- TNA 2013-06-07

[Tatsujin]

They put themselves under by their stupid offering of lifetime membership for 10,000 baht. Of course, they knew by then they were going under and were screwing people as much as they could before running off.

[camo007]

They had much more then 1000 members in Thailand affected. Please get your facts right!

[joeaverage]

is anybody surprised, the writing was clearly on the wall.

[neatfeet12]

Good to know where my money went!

[MEL1]

They had much more then 1000 members in Thailand affected. Please get your facts right!

As far as I can see, they did get their facts right as the report clearly says, 'last year affected shareholders and more than 1,000 members.'

I don't see any inaccuracy in that!

-mel.

[Misterwhisper]

Well, at least "someone" got healthy.

[Thai at Heart]

Who are the pooyai Thais in this company?

[Thaddeus]

All I can say is ................. WOW

[Loptr]

And just why is the money laundering agency investigating this and reporting it in the media? Hardly an uncommon fact that companies move capital around to suit their needs. Nothing illegal in that. Just goes to show the power of governments these days. Private banking records scrutinized and the findings splashed in the news. Sounds like something that would happen in the US.

[trainman34014]

Most probably this is common practice for many Thai business enterprises. Get your money out of the country boys and build up a nice retirement fund or 'something for a rainy day' just in case it all goes arse upwards.

[Credo]

And just why is the money laundering agency investigating this and reporting it in the media? Hardly an uncommon fact that companies move capital around to suit their needs. Nothing illegal in that. Just goes to show the power of governments these days. Private banking records scrutinized and the findings splashed in the news. Sounds like something that would happen in the US.

I think the company went into bankruptcy/receivership owing a lot of money which is now not available to pay off their debtors.

[JetsetBkk]

Most probably this is common practice for many Thai business enterprises. Get your money out of the country boys and build up a nice retirement fund or 'something for a rainy day' just in case it all goes arse upwards.

Sounds logical, but isn't it the case that it was the "sending of the money out of the country" that caused C-Wow to go bust?

This is similar to "double glazing" companies in the UK - once their order books are full and customers have paid something up front, they go bust and all the money has disappeared.

[itchybum]

So some Thais got ripped off by a foreigner.

Thats a shame.

[Loptr]

And just why is the money laundering agency investigating this and reporting it in the media? Hardly an uncommon fact that companies move capital around to suit their needs. Nothing illegal in that. Just goes to show the power of governments these days. Private banking records scrutinized and the findings splashed in the news. Sounds like something that would happen in the US.

I think the company went into bankruptcy/receivership owing a lot of money which is now not available to pay off their debtors.

I am aware of that, still the courts need to determine whether a crime was actually committed or whether it was simply poor management is the question. The media is hardly the place to make your case.

[SteveReilly]

So finally a case where a farang rips off a lot of thais!

[Soi Sauce]

They did nothing different to what Thai politicos do and are doing big time at the moment b4 the baht collapses.

Follow the example, m\quote president, and be declared innocent.

Like on TV, Mr T's got a lot of gold overseas.

[pedro01]

And just why is the money laundering agency investigating this and reporting it in the media? Hardly an uncommon fact that companies move capital around to suit their needs. Nothing illegal in that. Just goes to show the power of governments these days. Private banking records scrutinized and the findings splashed in the news. Sounds like something that would happen in the US.

It was a listed company. The owners are the shareholders, it was their money that was moved offshore.

This was a Thai company. Where would they be moving the capital too? Did this Thai entity have gyms offshore?

[Salapoo]

1,600 Million baht.... US$52 Million.

Nice bit of change.

How anyone couldn't foresee this when they were handing out 'lifetime' memberships for a few K baht I don't know.

Well, except for the amount involved.

Isn't it odd the names and addresses of those involved aren't printed in the Thai press.

[Salapoo]

They did nothing differnent to what Thai politicos do

Utter nonsense.

They keep it it black bin bags under their very large bed.

[jbrain]

1,600 Million baht.... US$52 Million.

Nice bit of change.

How anyone couldn't foresee this when they were handing out 'lifetime' memberships for a few K baht I don't know.

Well, except for the amount involved.

Isn't it odd the names and addresses of those involved aren't printed in the Thai press.

Well, if those few K lifetime memberships brought inm 1.6 billion Baht it seems that it was a profitable business, if only they had used the income to maintain their services.

Which is obviously not the case and makes it a swindle.

[skippybangkok]

They put themselves under by their stupid offering of lifetime membership for 10,000 baht. Of course, they knew by then they were going under and were screwing people as much as they could before running off.

yep, you dont need to be a financial genius that they were milking it for what it was worth..... but then again, what else would you expect with their high pressure sales too

[Thaddeus]

1,600 Million baht.... US$52 Million.

Nice bit of change.

How anyone couldn't foresee this when they were handing out 'lifetime' memberships for a few K baht I don't know.

Well, except for the amount involved.

Isn't it odd the names and addresses of those involved aren't printed in the Thai press.

Well, if those few K lifetime memberships brought inm 1.6 billion Baht it seems that it was a profitable business, if only they had used the income to maintain their services.

Which is obviously not the case and makes it a swindle.

A bit like an Elite Card.

[rubl]

"Pol Col Sihanart Prayoonrat said the peak of financial outflows were in 2009-2011 when California Wow sent its money out of Thailand via Swift code, adding that a preliminary investigation found 10 people implicated in the scandal."

At least the money laundering was not in Thailand. That should mean the possible move of the grey list is not effected. Do I miss something here?

[IsaanUSA]

So, where did the money go?

[EyesWideOpen]

The Thai police could redeem themselves to some extent by tracing where the money went, taking it back with a court order, and refunding it to the people who lost money. Oh sorry, just woke up from a dream..

Would be curious to find out what the ownership structure was. Had to be some heavy hitter Thai people involved, I suspect the news stories will not be naming them... :-)

[smedly]

the simplest way I can think of explaining what happened here is

Your local bar offers you a deal - pay me (the owner) 100k baht and I will give you free beer for the next 6 months covered by the one off payment, 1 month later the bar closes and you calculate that you got 10k's worth of drink, meanwhile the owner that took your 100k unknown to you transferred your money along with 100 others to an offshore bank account and got on a plane and left the country

That in simple terms is what happened to CW

[IsaanUSA]

The Thai police could redeem themselves to some extent by tracing where the money went, taking it back with a court order, and refunding it to the people who lost money. Oh sorry, just woke up from a dream..

I don't think international money transfer investigations are handled by regular police officers. I would think that this would be a federal policing agency's job.

[webfact]

UPDATE:
AMLO goes after California Wow management
Piyanuch Thamnukasetchai
The Nation



BANGKOK: -- The Anti-Money Laundering Office (AMLO) is taking action against local management members of fitness club chain California Wow, which it says fabricated its accounts to show losses while transferring more than Bt1.69 billion abroad over a 10-year period of operations.

Secretary-general Seehanart Prayoonrat said yesterday the pattern of behaviour of California Wow pointed to public fraud and tax evasion - offences under AMLO's jurisdiction. These ranged from suspiciously false statements made to the stock market that is was operating a loss since 2003, to suspicious wiring of money overseas despite continuously reporting losses.

Seehanart said California Wow's operation in Thailand was basically an illegitimate money-transaction business, which led to members suffering bad service and losing their membership fees, its stockholders losing their benefits and Thailand losing revenue. "It is basically a systematic, wisely devised and well-planned and operated public fraud," he said. "The motive to cheat customers since the beginning of operation is quite apparent."

There are 10 people facing legal action by AMLO, said Seehanart, who has not yet named them. The Department of Special Investigation, the police's Crime Suppression Division, and the Office of the Securities and Exchange Commission are coordinating with AMLO in jointly probing further into the California Wow case.

He said the suspects, who were part of the Thailand-based management members, were expanding the chain in a few countries, including the Philippines. AMLO believes it can retrieve all the money transferred out of the country, he said.

California Wow was established when the Thailand and Korea locations were spun off from California Fitness in the early 2000s. In 2012, California Wow was sued in Thailand's Bankruptcy Court by Bangkok Bank, which sought the repayment of a Bt72-million loan, including Bt4 million in interest. As a result, California Wow shut down seven of its eight Thailand branches.

Seehanart said California Wow was listed in the stock exchange in 2002 - the first year of its operation in Thailand and the only time it reported profits. AMLO has been tracking the transfer of money and is aware of destination countries where relevant authorities have been informed of the issue.

"The highest amount transferred - Bt495 million - was in 2010," he added.


-- The Nation 2013-06-08

[Thai at Heart]

Makes you wonder what were the auditors doing?