Prinsiri admits wrongdoing

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Prinsiri admits wrongdoing

Friday, 04 April 2008

source: Bkk Post Apr 1 2008

Built condos without construction permits

The listed developer Prinsiri Plc (PRIN) admitted that it illegally started construction on The Pulse Phahon Yothin 37 condominium as it did not have the proper construction permits.

The Bangkok Metropolitan Administration forced the company to stop construction. Now Prinsiri says it will belatedly follow the law and wait for the proper permits to be approved.

''We admitted we were wrong as we didn't have construction permits before starting construction,'' Pornprom Vongpivat, the company's vice-president for finance, said yesterday.

The 636-million-baht Pulse Phahon Yothin 37 is designed to have two buildings with a total of 308 units. Construction on Tower A was 40% complete, while Tower B was 80% complete. Construction on both has been stopped.

''Like other condominium developers, we asked for construction approval via Article 39 of the Building Control Act by submitting the plan of both buildings with fewer than 79 units, and we would correct the design later,'' he said.

Prinsiri could not seek permits via Article 39 for both buildings together as they would be located on the same plot and developed by one firm. As such, it started building Tower B first while waiting for environmental impact assessment (EIA) approval.

At the same time, it submitted an EIA for Tower A before seeking a construction permit. However, it had to adjust the EIA report three times after waiting for six months, and it still hasn't been approved.

''On the last submission, our management expected to obtain EIA approval and the company would have transferred units to customers as promised in May this year. So we started the construction of Tower A.''

Although Prinsiri did not receive EIA approval for Tower A, it refused to stop building until the Bangkok Metropolitan Authority (BMA) ordered it to stop building both towers. Tower A had no permit while Tower B was constructed with an incorrect plan.

He said the BMA gave the company a chance to obtain a legal construction permit.

The company needed to submit a Khor. 1 under Article 21 for retroactive construction approval, but would have to pay a fine of about three million baht for building without a permit.

At the same time, the company would refund down payments, including compensation of 7.1% interest per year, for any customers who wanted to return units. To date, only 10 of 300 units were returned, said Mr Pornprom.

He said the company was clearing all its problems and was expected to finalise the buildings within this month.

''From now on, we will definitely wait for the EIA approvals before starting construction of new projects.''

Prinsiri has launched three new condominiums in 2008: a 422-million-baht project in Pattaya Sai 2 with 280 units; a 1.4-billion-baht project in the Rat Burana area of Bangkok with 555 units; and an 885-million-baht, 312-unit building on Si Ayutthaya Road.

Another four condos planned for 2009 will be located in the Taksin and Pin Klao areas, Pattaya Na Klua and on Kampaeng Petch Road.

Prinsiri will also open sales of four projects: in the Samakkee area with 325 units worth 954 million baht; Bang Bon with 160 units worth 796 million baht; Vacharapol with 560 units worth 1.69 billion baht; and Krungthep Kreeta with 535 units worth 1.2 billion baht.

Mr Pornprom also said the company cancelled a new share offering worth 335 million baht at one baht apiece. Instead it will offer one warrants for every three shares held by existing shareholders to compensate for a lower dividend payment for 2007.

Shares of Prinsiri (PRIN) closed on the Stock Exchange of Thailand at 2.88 baht yesterday, down six satang, in trade worth 670,000 baht.