Real Estate News
 
      Land deal sparks technical complain   ( January 27, 2007 )
 

The Financial Institutions Development Fund will file a complaint against Potjaman Shinawatra for "technical" errors over her 2003 purchase of a 33-rai land plot for 772 million baht.

 

Tarisa Watanagase, the governor of the Bank of Thailand, said the fund had already sent a letter to the Assets Scrutiny Committee confirming that damage had been incurred during the land auction.

 

"But the damage that occurred was not necessarily due to the price received during the auction, but rather technical problems. Our complaint will be based on this," Dr Tarisa said.

 

Phairoj Hengsakul, an assistant central bank governor overseeing the FIDF, said if the court found that Khunying Potjaman had violated the anti-graft law in buying the land, the sales contract would be voided and the plot returned to the fund.

 

"If so, this would result in certain costs and damage to the fund," he said.

 

The ASC has highlighted the 2003 land purchase as one of several cases involving potential corruption during the Thaksin Shinawatra administration. The ASC had argued that Khunying Potjaman had violated the anti-corruption law which bans state officials from entering into contracts with state agencies under their supervision.

 

Khunying Potjaman was the highest bidder in the December 2003 auction, beating out competing bids submitted by property developers Land and Houses, and Noble House.

 

The case has been complicated, however, by a dispute between the ASC and the central bank regarding the legalities of the bid. The central bank, which at the time was headed by current Finance Minister Pridiyathorn Devakula, has contested claims by the ASC that the auction resulted in financial losses for the FIDF.

 

But fund officials maintain that the 772-million-baht sale price was reasonable given the sharp decline in asset values after the 1997 financial crisis. The final auction price also compared favourably against a valuation of 700 million baht by the Land Department.

 

The FIDF purchased the land plot from the defunct Erawan Trust in 1995 for 2.14 billion baht in a contract approved under government policy at the time to assist the ailing financial institution.

 

Erawan Trust had actually seized the land from a defunct borrower for only 103 million baht.

 

Source - Bangkok Post (Eng)

 

 

 
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