Monday, March 26, 2007

Potjaman charged with tax dodging

Released on bail with stepbrother, secretary

THANATHORN THIA SURASAK GLAHAN

Potjaman Shinawatra, wife of ousted prime minister Thaksin, her stepbrother and her secretary were yesterday charged in the Criminal Court with tax evasion in the transfer of Shin Corp shares in 1997. Khunying Potjaman, Bannapot Damapong and Karnchanapa Honghern were released on bail of five million baht each in what was the first case processed by the Assets Scrutiny Committee (ASC) to reach the Criminal Court.

Public prosecutor Seksan Bangsombun, of the Office of the Attorney-General's special case division, and his team filed the case at 10.30am.

Khunying Potjaman and Mr Bannapot were charged with conspiring to evade taxes amounting to 546.12 million baht in the 1997 transfer of Shin Corp shares and of lying to authorities when questioned about it four years later.

Ms Karnchanapa faces one count of conspiring to evade taxes.

If found guilty, Khunying Potjaman and Mr Bannapot could each face up to 14 years in jail and a fine of 400,000 baht.

Ms Karnchanapa could face a jail term of up to seven years and a 200,000-baht fine.

The three denied all the charges and the Criminal Court scheduled May 14 as the date for reviewing the evidence of witnesses for both sides.

The defendants put down six million baht each as surety for bail. The court agreed to their temporary release on bail of five million baht each on the condition that they, their representatives and lawyers, not talk to the media in ways that could affect the trial or violate the court's orders.

Khunying Potjaman did not speak to the media after leaving the courtroom.

Noppadol Pattama, the Shinawatra family's lawyer, said he was not part of the team of lawyers appointed to study the case. It was also not the same team who represented Mr Thaksin when he stood trial on asset concealment charges in 2001.

About 20 people turned up at court yesterday to show their support for Khunying Potjaman.

They included Mr Thaksin's youngest sister Yingluck Shinawatra, brother-in-law Somchai Wongsawat, Mr Thaksin's secretary Phadung Limcharoenrat, socialite Darunee Kritboonyalai, and former Thai Rak Thai party deputy leader Pongthep Thepkanchana.

The ASC did not consider the share transfer in 1997 real because Khunying Potjaman was found to have acted as both the buyer and seller _ by paying for the shares for her stepbrother Bannapot via her maid and then getting the money back. In its report, the ASC referred to a number of bank accounts and cashier's cheques issued by Siam Commercial Bank as the financial trail. To add weight, the ASC investigators quoted the maid, Duangta Wongpakdee, as saying she was a nominee for Khunying Potjaman and only followed her boss' orders.

The ASC decided the transaction was set up with the intention of evading tax as the two could have been eligible for tax exemption if they had traded the shares on the Stock Exchange of Thailand.

In 2001, when authorities found out that the trade was not real, Khunying Potjaman informed tax officials that she gave the shares to her stepbrother as a gift. The ASC said this stopped the Revenue Department from ordering them to pay tax, and charged the two with lying to authorities to evade tax.

Although the ASC late last year ordered the department to demand tax from Mr Bannapot, the fact that the agency had not done so for almost six years could be used by Khunying Potjaman and Mr Bannapot as part of their defence in court.

Tithipan Chueboonchai, a tax law lecturer at Chulalongkorn University, said it was crucial to prove the defendants' motives in the case. He said the two could claim they did not intend to evade tax by referring to the Revenue Department's acknowledgment that the deal was a gift.

But it would be difficult for them to defend in court that the shares transferred via the stock market were a ''gift'' and tax-exempt.

The ASC report says a broker who handled the deal for them told the probe team that a sum of 7.38 million baht was paid as a broker's fee and value added tax. The broker said the fee and VAT were not required for transferring shares as a gift via the stock market.

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