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The Rediff Business Special

The NRI who caused the Thai crash

Part I: The NRI fugitive

As the economy fluctuated and financial scandals surfaced, Thailand set up the Securities and Exchange Commission in 1992. However, the government and the central bank were far from getting their act together. Not all loopholes were plugged. Luck seemed to be Saxena's friend. But only just.

In January 1996, Saxena switched gears. Allegedly misusing his proximity to Bangkok Bank of Commerce president Krirk-kiat Jalichandra, Saxena -- with help from 52-year-old, Canadian accountant Les Hammond whom he chanced upon at a gathering in Bangkok and charmed him to become his ally -- decided to take a $ 65 million BBC loan to buy three telecom companies. The loan was granted to City Trading Corporation, a Cayman Islands-based shell company owned by Saxena and created by Hammond for the very purpose.

The plan was to buy the three companies -- Swift Global Communications, ViTel International Holding Company and Comwave Communications AG -- that Saxena had already bought for $ 50 million, meld the three into one entity and resell the big one for a decent profit. BBC offered the loan after being assured that it would be given shares of the companies as collateral: after the resale, it would be repaid, everything will be okay, thank you.

Saxena and associates completed the resale for $ 75 million. But BBC never got the shares. Worse, it did not get repaid.

More was to follow. Four months later, Saxena teamed up with Russian businessman Oleg Boiko, owner of the National Credit Bank of Moscow, and took a $ 80 million loan from the BBC against bills of exchange guaranteed by the NCBM in the name of a shell company owned by Saxena. The bills of exchange proved mere paper -- nothing more, nothing less; Boiko's Moscow bank downed shutters soon after. BBC had burnt its fingers again! Why BBC agreed to commit a double-fault, so to day, remains a mystery.

Thai newspapers unleashed reporters to ferret out interesting information about the BBC. The latter succeeded. A splash of stories on the troubled BBC shook the nation out of its stupor. The bad loans, the worthless collateral, the financial fudging became public knowledge. But more shocking news was to follow.

Among those who gained directly or indirectly were senior government ministers and the central bank's governor and Krirk-kiat's golfing partner Vijit Supinij.

Infuriated and insecure BBC shareholders made a run on the bank's deposits. BBC realised it was neck deep in trouble. The bad loans were sinking it. Thailand's central bank realised Krirk-kiat has not been paying heed to its secret warnings. It cracked the whip. BBC's assets were frozen.

This strained Saxena's relationship with Adnan Khashoggi. It so happened that Saxena and Krirk-kiat, after taking over Morakot in which Kashoggi had a sizable stake, offered the latter's shares as collateral to BBC while raising all those fabulous loans. In the aftermath of the exposure, BBC found takers for Khashoggi's shares, a development that infuriated him no end. No amount of lobbying could save the day for Saxena and Khashoggi.

Meanwhile, as public outrage intensified, Supinij sensed a threat to his job and decided to dump Krirk-kiat. Before long, the latter and Saxena fled to Switzerland where they had bank accounts.

Within weeks, Supinij was shown the door. Krirk-kiat later returned to Bangkok and surrendered to the police.

It was May 1996. On 23rd, Saxena fled to Vancouver on a visitor's visa issued a few days before the crackdown on BBC. He went in for landed immigrant status through Canada's Investor Immigration Programme.

Canada was a chosen getaway. Starting in 1992, Krirk-kiat and Saxena bought two shell companies listed on the Vancouver Stock Exchange. These helped the two to go on a company-buying spree in North America. Their acquisitions ranged from computer stores to stock brokerage firms.

Hammond allegedly chipped in with creation of convenience companies that existed merely on official paper. There were 13 such outifts in Canada, 19 in the British Virgin Islands, a few in the Cayman Islands, two in Belize, a few more in Thailand, Australia, Russia and Czechoslovakia. These legal entities allegedly did no real business, much less had employees.

All that was threatened by the Thai criminal investigation and Saxena was arrested in Canada on July 7, 1996 in Whistler, a ski resort. His briefcase contained $ 100,000 in various currencies!

But bail was easy: 'just' $ 840,000. Saxena was a free man again. Almost.

The Bangkok experience would hold him in good stead in Vancouver. Life, Saxena believed, has to be lived in the way he knew it. Flashing his seemingly impressive investment portfolio, he would ease into social circles. Stories abound that he would strut around in five-star lobbies with four cell phones on him. If he was not talking to someone in Thailand, he was on the line to Britain, or France, or Hong Kong, maybe even India.

Media reports speak of his connections with then Indian prime minister P V Narasimha Rao and the tantrik, Chandra Swami. Apparently, Saxena once toyed with the idea of seeking Rao's help to extricate himself from Canada's judicial clutches.

His activities spanned from corporate coups to political peddling. One story goes that Saxena got British officials involved in a British-based private security company called Sandline International. Sandline plotted the reinstatement of Sierra Leone's ousted president Ahmad Tejan Kabbah by supplying arms and mercenaries, much in violation of the United Nations arms embargo. In exchange, Saxena was to get free access to Sierra Leone's diamond, gold and mineral mines. Sandlines' role is under investigation now, and could still cost British Foreign Secretary Robin Cook his job.

January 1998 was to be fateful. Luck, perhaps for the first time, seemed to desert Saxena. He was re-arrested, on charges of wrongful possession of a Yugoslav passport. This time, bail was denied as the court believed he had tried to bully witnesses.

Then, Hammond, arrested for allegedly obstructing justice and facing jail, agreed to be a witness for Thailand. Hammond's testimony -- he has already spilled quite a few beans -- and thousands of files seized by the RCMP are expected to cost Saxena his dream if dangerous run.

Nevertheless, that he has managed to remain in Canada, away from Thailand, for two years speaks volumes of his staying power. In Thailand, Krirk-kiat continues his efforts to extricate himself from hundreds of charges of financial crime. After all, he was the one who cleared most of the fateful loans.

The extradition hearing was first sought to be completed by June 5. Delays arising out of threats to Hammond's life in May and security considerations have put paid to the Canadian judiciary's plans.

The decision on extradition is expected to be reached in October. Saxena may not dislike the lengthy appeal process. He has raked in megabucks, he has sucked everybody he chanced upon dry. ''I'm very good at gut feelings,'' he is reported to have once told a Thai banker. Ensconced in a condominium in Canada and watching all those lovely yachts sail by, he can perhaps afford not to be bloody careful.

The NRI fugitive

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