Many people will be concerned about what is probably the most prestigious development in the whole of the Eastern Seaboard, namely the Beaches Water Theme Park and Hotel Development. It has been lauded in the media as being Pattaya’s claim to fame and we have all been expecting great things from it.
However, after a colossal amount of time, it still shows no sign of breaking ground and a few weeks ago we learnt about a mammoth scam having been perpetrated by its Vice President of Sales and Marketing, George Morgan. Avid readers will have already seen PDN’s coverage of this, those who haven’t can follow the link below.
Apart from Thai Ratch, which published the report in Thai, virtually no other publication has had a word to say, apart from us and Thai Visa.com, the comments from their forum I take the liberty of reproducing as follows: “Vp Of "the Beaches" Condo Project Arrested For Fraud, 100 million in depositors money lost? To which the reply “Another blow to the Pattaya property market”. The facts of the matter are that rather than Bt100 million, it is nearer Bt200 million, according to one informed source. Another commentator on Thai Visa said “I am sure we will hear about more of these incidents before this current ‘downturn’ is over so people should insist the money goes into Escrow before paying anything to anyone.”
Accordingly, wishing to find why everyone was keeping silent, which is extremely unusual in this town, to say the least, we at PDN felt we had no option but to go and speak personally to the developer, Mr.Laikat Dhanji, himself. This we did and were well received. We were told the reason for the media silence was that the Crime Suppression Unit (CSU) had put a blanket of silence around George Morgan’s scam, so as not to jeopardise the court hearing.
Mr. Laikat told us he was completely oblivious to the whole racket and the first he had heard about it was when a client notified him of the scam, after which he, himself, had called the CSU. Apparently, George Morgan had forged the company seal and was telling the clients he dealt with that he had a special deal and could offer them 50% discounts, but they should tell no-one what he was offering otherwise the contracts would be cancelled by the boss i.e. Mr. Laikat; by this method, he maintained secrecy, which is how, presumably, he was able to pull off the scam.
We then asked the question on everyone’s lips, “Are you prepared to recompense the clients who have lost out?” Mr. Laikat replied that it was on George’s shoulders and was not his responsibility. What Mr. Laikat wanted, he said, was for clients who had suffered to attempt to sue George Morgan, themselves, rather than his company.
We then asked the other salient question, “When is the Beaches going to get off the ground, that is, to actually start building?” to which Mr. Laikat replied that the schedule had now been changed. Rather than starting to build the hotels, first, which had been held up at the bureaucratic level due to constant changes in the EIA (Environusntal Impact Assessusnt) regulations, the order of construction was going to start with the building of the Water Theme Park, which he assured us is due to start at the end of July or early August.
Now, we were prepared to let things ride and see what happened, but a few days ago PDN was approached by one of The Beaches’ major agents, Farang.ru, a Russian real estate agency active all around Thailand, who were very concerned about certain of their clients’ contracts with the Beaches, namely, that virtually all of them had different seals and signatures on them.
The MD of Farang.ru, Mr. Grant Babinyan, told PDN that they had dealt virtually exclusively with George Morgan, who had always been represented by the company as being their main interface with the world, so when anyone ever called at the Beaches sales office, they were automatically directed to George. Consequently, of the 10 contracts all told that they have with the company, they are not sure whether any are bona fide or not and so far, nobody at the Beaches is prepared to clarify matters.
Mr. Grant Babinyan
Mr. Grant, as one might expect, is extremely concerned about the whole matter, as it reflects badly on his company’s reputation. His clients, likewise, are extremely anxious, mainly because they don’t know where they stand. Other companies suffering problems over the economic downturn who have put their projects on hold have in some way reassured their clients by returning their investments in full, or giving them cast iron assurances that their investments are safe. This The Beaches has manifestly failed to do. Mr. Grant is even prepared to return the 3% commission he received and is even considering recompensing his clients himself. As it happens, all Mr. Grant’s clients have given him power of attourney to take either George Morgan or The Beaches to court to get soME satisfaction, one way or the other.
One suggestion put forward by Mr. Grant to Mr. Laikat was that he should honour the contracts, regardless. This would solve all the problems but this, so far, has not met with Mr. Laikat’s approval. Another of Mr. Grant’s clients apparently paid his investment directly into the Beaches’ account and was given a fake contract in return. Mr. Grant brought this to Mr. Laikat’s attention and he agreed to give Mr. Grant’s client a bona fide contract instead, but so far, this has not been forthcoming.
Mr. Grant, as one might surmise, is extreusly frustrated and is at a loss as to what to do about his clients’ suspect contracts. “And what about the future?” he asks. Perhaps the answer is to put any funds in an Escrow account, which at least safeguards the client’s money. Another problem arises here, however. Thai banks, although they have the necessary procedures in place to handle Escrow, are reluctant, for reasons best known to themselves, to facilitate that route. The other solution is one which investors are increasingly pursuing, namely only to buy when a project is finished and can be seen in all its glory. The appeal of buying off-plan (i.e. before completion) with all its promises of high yields has become decidedly tarnished.
As for the Beaches, we at PDN, on behalf of all our readers and interested parties, would like to see justice done and cheated clients recompensed, otherwise the damage to the Pattaya property market will be incalculable, especially as The Beaches is the only (supposedly) ongoing flagship project.
We should like a clear statement once and for all from Mr.Laikat Dhanji as to what is happening, both as regards the scam perpetrated by George Morgan and when, if ever, the Beaches is going to materialise. This we hope to bring to you in a couple of days, when we have finally managed to interview Mr. Laikat again, until then we, like everyone else, are on tenterhooks.
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