Leicester’s owner, King Power, accused of £327m corruption in Thailand

The company which owns Leicester City and funded the club’s rise to become 2016 Premier League champions has been accused of multimillion-pound corruption in the operation of its business in Thailand. King Power, owned and run by the Leicester chairman Vichai Srivaddhanaprabha and his son Aiyawatt, is alleged to have corruptly short-changed the Thai government of its agreed share from the company’s lucrative duty free franchise at Bangkok’s Suvarnabhumi airport.

King Power International, which owns Leicester, is accused of criminally failing to pay the Thai state 14bn baht (£327m) from the operation of the airport franchise, whose original grant in 2006 required 15% of the income to be paid to the government. The lawsuit – a copy of which was seen by the Guardian – was filed by Charnchai Issarasenarak, deputy chairman of a government anti-corruption subcommittee. He alleges that King Power colluded with airport employees to pay the government only a three per cent slice of the duty free takings.

King Power bought Leicester City for a reported £39m in 2010 when the club was in the Championship, and then loaned the club more than £100m on players, wages and bankrolling losses, which were written off after the club won promotion to the Premier League in 2014.
Explaining the legal action to reporters in Thailand, Charnchai said: “We ask the court to accept this lawsuit as a criminal lawsuit, and use the law to punish those who commit wrongdoings. We also ask the court to consider seizing all the 14.29bn baht [£327m] from them to the state. Nobody should ever gain [anything] from this said amount ... This case causes substantial damages to the state and is a very severe case.”

Two other King Power group companies owned and run by the Srivaddhanaprabha family have also been accused of corruption in the legal action, along with a senior King Power executive. Fourteen officials working for Airports of Thailand have also been named in the action. The lawsuit alleges corrupt misconduct and a failure to act with honesty and integrity.

Vichai Srivaddhanaprabha established King Power in 1989 with one small shop in Bangkok, then attained major wealth in 2006 when his company was granted the exclusive franchise for duty free sales at Suvarnabhumi airport, said to be the 12th busiest in the world. At the time the prime minister of Thailand was Thaksin Shinawatra, who was later ousted in a military coup. The successors and bitter rivals to Shinawatra, who took over Manchester City in 2007, remain in charge of the country.

The lawsuit alleges that the requirement on King Power to pay 15% of the revenues to the government was agreed when the contract was signed in 2006. The current prime minister of Thailand, General Prayuth Chan-ocha, has been named by Charnchai as a witness in the case, along with 32 other people; 50 documents have been submitted in support.

Charnchai has said that he is preparing a further four cases against King Power, which he expects to file in two months. A court decision on whether to accept the first case is expected on 25 July, according to reports.
“Filing a lawsuit against someone isn’t fun,” Charnchai said, “because they can counter-sue us, but we have checked accuracy, and are ready to be counter-sued. We don’t do this based on a personal [issue], but it is about the nation.”

Aiyawatt Srivaddhanaprabha, the Leicester vice-chairman and chief executive of the King Power group, was reported in the Bangkok Post to have denied that the company had breached any laws over the 11 years since it was granted the duty free franchise at the airport. Asked by the Guardian via Leicester City whether he would confirm the details of the case and respond to the allegations, the club replied to say that Aiyawatt had declined to comment.

The Airports of Thailand president, Nitinai Sirisamatthakarn, was reported by the Bangkok Post to have denied the allegations, saying that King Power had adhered to its contract and paid the correct government fees according to the space occupied at the airport.

It is not clear what impact the case could have on Leicester City if it proceeds and succeeds and King Power become liable to pay huge amounts of money to the government. Premier League rules prohibit people from owning more than 30% or being a director of a club if they have been convicted of a criminal offence of dishonesty, but neither Vichai, Aiyawatt nor any other Thai director of Leicester has been charged personally. - The Guardian