California Wow Allegedly Siphoned Bt1.6 Billion Overseas

[noitom]

There was a spread in Thailand Tattler or some other elite Thai rag on the owner and his custom built 50 million house in Phuket. He was a foreigner a I recall. The article states that he used "SWIFT" to send his money abroad. Well, there must be a bank involved because SWIFT is a network of bank members using that network to transfer money. So why isn't the police and the newspaper running down the Thai bank source of Cal Wow's accounts and the bank officers responsible and getting some of the skim?

[jalansanitwong]

Fitness centre scams have been around since the early 1980's. In Australia they were setting up shop everywhere. Life time membership 5000 dollars ! The fitness centre near us went bust after about 12 months and milked hundreds of people on yearly & some life memberships .

Who are the back room Thai guys with WOW? pray tell! A new batch of Lamborghin's i on the boat as we speak.

[ongchart]

Founder is a Canadian - Eric Levine. He appeared in most high society magazines being featured with his ex-super model Thai wife. Here's a feature on his 50m baht house. http://www.designsigh.com/2009/09/eric-levine-home/

[ongchart]

Btw, how is it that a one year old company can be listed on SET? I think public shareholders and members should sue the SET for allowing this in the first place for negligence and even fraud.

[Thai at Heart]

As nice as it might be to slap the foreigner, the ownership had to be 51% Thai right?

Note the Thai name as the fellow founder. Wait for it, they will find out that the Thai company had to pay huge royalties to some licensee overseas.

If it works for Starbucks.

[technologybytes]

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... :-)

I can tell you exactly what the ownership structure was. A company with minimum 51% Thai shareholding and a maximum of 49% Foreigner shareholding .

So it's unfair to say that it was a foreigner ripping of Thai's, it was majority Thai. The Thai's can't have their cake and eat it.. if foreigners can't own a business in Thailand... how can they be blamed when it goes tits up.

[Thai at Heart]

http://investing.businessweek.com/research/stocks/people/board.asp?ticker=CAWOW:TB

This lot should know where it went.

[ezzra]

Yeah, close the barn doors after the horses has bolted with

our money....good luck to the DSI and anybody else

recovering even one baht back.

[Salapoo]

Makes you wonder what were the auditors doing?

Hiding the envelopes of their own?

[jamhar]

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.

I find this practice fairly common in the US also. This often happens when a fitness club is some under financial pressure for one reason or another and need to generate some cash flow quickly.

when you see a life time offer on the cheap, the buyer should go into it knowing that it may be a "limited time offer" and make use of what is offered quickly.

But in this case, the fitness club may have been just a front. And the front was maintained until it was no longer useful. Then the club had to survive on its own and couldn't.

Of course this is pure speculation on my part. I only offer this in the best intent, ala CSI TV

[julemanden]

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

Yeah + shareholders

[pete66]

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.

Except that was the plan all along. Offer "life-time memberships" at amazing prices, knowing full-well its the life-time of the company they are selling, not the life-time of its members.

If people remember nothing else from WOW, remember the "life-time membership" trick. Its amazingly easy to pull off.

[harrycallahan]

Makes you wonder what were the auditors doing?

And what did they sign in the annual reports?

[pete66]

There was a spread in Thailand Tattler or some other elite Thai rag on the owner and his custom built 50 million house in Phuket. He was a foreigner a I recall. The article states that he used "SWIFT" to send his money abroad. Well, there must be a bank involved because SWIFT is a network of bank members using that network to transfer money. So why isn't the police and the newspaper running down the Thai bank source of Cal Wow's accounts and the bank officers responsible and getting some of the skim?

Of course he used SWIFT - otherwise known as a "bank wire", or do you think he had cash stuffed down the front of his lycra running shorts and got it out the country that way?

[ongchart]

As nice as it might be to slap the foreigner, the ownership had to be 51% Thai right?

Note the Thai name as the fellow founder. Wait for it, they will find out that the Thai company had to pay huge royalties to some licensee overseas.

If it works for Starbucks.

We all know what happens in these 'Thai owned' companies. Most Thai names are just proxies...

[Thai at Heart]

As nice as it might be to slap the foreigner, the ownership had to be 51% Thai right?

Note the Thai name as the fellow founder. Wait for it, they will find out that the Thai company had to pay huge royalties to some licensee overseas.

If it works for Starbucks.

We all know what happens in these 'Thai owned' companies. Most Thai names are just proxies...

Not this one, it's on the stock market.

[Estrada]

It was formed in 2003 as a JV between Fitness Holdings Inc 51% (Now called Elite Holdings) and Major Cineplex 49% owned by the Poolvaraluck Family. The Company was listed on the stock exchange as CAWOW. It made a profit in the first year of trading after that I believe that it made substantial losses, however ordinary shareholders continued to buy CAWOW stocks whilst Major dumped all their shares that they had in CAWOW and the ordinary investors lost their shirts. The Americans headed up by Howard David Levine are still the major shareholders in CAWOW. The largest Thai Shareholder is Mr Nathapol Jurangkool (12%) aged 26 who's father started Summit Car Parts Group.

[asiamaster]

Founder is a Canadian - Eric Levine. He appeared in most high society magazines being featured with his ex-super model Thai wife. Here's a feature on his 50m baht house. http://www.designsigh.com/2009/09/eric-levine-home/

WOW! But also somebody posted a couple of days ago that the house has been sold . So possibly Eric Levine was screwed by his Thai partners. Surprise? Not really!

Also the math does not make sense to me. The article mentions more than 1000 members who paid 10.000 Baht. This amounts to 10 million Baht.

[gchurch259]

My Kingdom of Thailand Wife and I are some of the 1,000 Life Time Members. Our problem with them was always pressuring you for more classes and instruction. Instruction was too high. My wife could not go by herself because of all the men hitting on her, staff and customers.

I believe WOW was a franchise and maybe some of the money went out of country as fees

[jacko45k]

Damned cheek, that surely is a right reserved for PMs and MPs.

[sausageandmash]

If you read the small print, it probably said "free lifetime membership means the lifetime of the company, NOT the customer".

[gtm2k]

".......... losses every year from 2007 to 2013."

Isnt it true that if you report losses for 3 years continually, the business is forced shut down ?

[TallGuyJohninBKK]

Glad to see the AMLO folks are really on the ball here -- albeit a couple years and 1.6 billion baht TOO LATE!!!

And indeed, where did that money go??? Clearly, if they've tracked the SWIFT transactions, they can track what foreign account/accounts the funds went to.

[SICHONSTEVE]

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

They state that were MORE than 1,000 members - perhaps they should have said INFINITELY more to save you the bother of posting and me the bother of pointing this out. Do you know how much time you have wasted (of mine, yours, and people reading two unneccesary posts)??

[lensta]

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.

Does Thailand have a Federal Policing Agency? The other thing I am wondering is how did they manage to transfer that amount out of the country, even when I try to transfer 100K the banks don't like it.

[smedly]

Makes you wonder what were the auditors doing?

there is not really anything new in this behaviour, many directors/officers of companies floated on the market pay themselves huge salaries while running the company into debt, a lot of them put more shares up for sale which dilutes the share prices to maintain running costs (huge salaries) eventually is all catches up and those that bought shares lose everything through bankrupt proceedings - the company goes bankrupt not the directors, they get to keep what they paid themselves for sometimes years, there is a board which is supposed to keep it all legit and approve salaries etc but they are often in on it, ultimately it's the shareholders that lose out and in a business like CW were a service is provided to customers - they lose as well because they never actually bought anything physical like a product, it's up to the company to produce accurate financials and also ultimately up to the customers and shareholders to have done their due diligence - it's a legal scam and has be going on in the markets for years

[harrycallahan]

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

They state that were MORE than 1,000 members - perhaps they should have said INFINITELY more to save you the bother of posting and me the bother of pointing this out. Do you know how much time you have wasted (of mine, yours, and people reading two unneccesary posts)??

To be fair if it's the goal of the article to give the reader an accurate guide as to the actual number (obviously it is), and the number is much more than 1000, then it is a case of poor reporting.

"more than 1" would be accurate too, but pretty useless.

[Card]

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.

Yeah, I was one of them.

[harrycallahan]

Makes you wonder what were the auditors doing?

there is not really anything new in this behaviour, many directors/officers of companies floated on the market pay themselves huge salaries... [etc]

You're missing the point - whatever goes on needs to be transparent to shareholders and it's the auditor's job to ensure that the accounts present an accurate picture. For this they are paid a handsome fee and are themselves liable for signing off on dodgy annual reports. It's quite difficult for money to walk out of a company without creating a blotch on the balance sheet.

[drdoom6996]

Did Chalerm own the company?