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Published on November 29, 2007

Head of DSI Special Crime Office, Colonel Piyawat King-ketm, led his team along with officials from the Consumer Protection Board (CPB) and the Finance Ministry's Off-system Finance Suppression Division to search Easy Network Marketing on Srinakharin Road at 10.30am.

The firm's managing director, Pathom Ansakul, 28, who is also the leader of  Thai Rum Ruay Party, had been taken into police custody for questioning on Tuesday about his involvement in a suspected pyramid scheme.

Fourteen boxes of documents and computers were collected from the office amid security provided by 40 policemen. The investigation, which also involves company representatives, should have been completed late last night.

Piyawat said the DSI received a compliant from the CPB that the company was not operating as it had told the CPB, and instead was engaged in illegal activities by inviting members of the public to invest with the promise of high returns beyond the legal limit of 4 per cent.

He said such high returns were suspected to be generated from the principal of members who joined later, meaning the company borrowed money from newcomers to pay old members.

The company reportedly had investors buy shares at Bt1,450, and in return received rice and other consumer products to sell or consign to the company to sell for them, according to Piyawat.

The company promised that within three to six months the investors would get Bt2,750 per share, which was about 22 per cent interest per month. If the scheme had continued, the company would finally collapse and affect the country's economy and financial system, Piyawat said.

He said the company had been registered in 2005 as a direct-sale business of cosmetic products that paid its stockholders by dividend. However, it later notified the CPB that it would adjust its sale promotion plan to cover consumer goods.

Until September last year, complaints were filed to the CPB to probe its fund-raising methods, which were suspected to be similar to the pyramid scheme run by the notorious fraudster Mae Chamoi with her Chit Fund in the 1980s, in which many people lost a great deal of money through greed.

Over 100 investors camped outside the six-storey office yesterday while police, related officials and media members went inside to collect evidence.

The investors were upset that police searched the company, which they insisted was legal and had a proper marketing plan. They were especially upset with the media for covering the news. At 2pm, they surrounded the journalists in an attempt to prevent them from filing their news reports.

During the stand-off, a Daily News photographer who was recording the incident reportedly had his digital camera's memory stick broken by DSI officer Colonel Noppachai Pinthakup in a bid to end the conflict between the investors and the media. But the investors were not satisfied and a TITV cameraman received a blow to the head from an angry investor.

Hua Mark police superintendent Wattana Yeejin negotiated with the investors to release the reporters. Prior to this, Wattana said he believed the investors misunderstood the search by related agencies, which only needed a police presence to keep peace and order.

During the talk, the investors insisted journalists must report the company was legal and for TITV to apologise for their previous report, which said the company was cheating investors and its managing director had been arrested. They claimed the search by the DSI, along with the media reports would affect the company's business - and their investments.

One of the unhappy investors said the company was legal and paid taxes to the government every month, with a Bt5 million tax payment in August and a Bt3 million tax payment in July - but the DSI had still accused the company of being fraudulent.

"Our company pays dividends, it shares profits from selling goods among the members. We come here to collect dividends and collect goods for other members," he said, dismissing a reported threat that investors from upcountry would come to protest in Bangkok, saying they were coming for a party organised by the members.

At 4pm, the investors released the reporters and allowed the news vehicles to leave the area. The TITV cameraman and his assistant, along with Daily News reporter Surasak Thadcharoen, 27, then went to Hua Mark police station to file police complains.

Surasak told police that while he was at the company at 2.15pm, the investors pushed him in the chest and tried to take away his digital camera, but he refused to release it so they detained him.

Until Colonel Noppachai went to negotiate for his release, the investors insisted the film be destroyed, so Surasak showed them his camera used a memory stick. The investors insisted it should be destroyed - so Noppachai broke it. They then let Surasak go.

Since the stick belonged to his employer, Surasak said he must file a police complaint. He filed four charges against the investors: illegal detention, physical assault, extortion and destroying his property.

TITV cameraman Parinya Siwakul, 36, and his assistant Wiroj Srisuk said they were waiting for the television station executives to see if they should file a police complaint.

Parinya said Wiroj was talking to the investors so they could get their van out of the area but the investors tried to attack him, so Wiroj ran off and Parinya went to help him. They were then attacked by a group of investors until the police intervened.

About 4pm, police managed to walk the two out as they promised not to send their news report. About 4.40pm, the news vans of TITV, Channel 7, and The Nation were allowed out safely.

Meanwhile, Deputy Metropolitan Police Area 2 Colonel Piyaphan Pingmuang said the city police would not hesitate to act as they had assigned officers to watch many firms suspected of running similar schemes and will investigate if a damaged party filed a complaint.

The Nation