Complainants accuse the Thai MVNO K4 SIM of running a pyramid scheme, alleging THB 2 Billion in losses

According to the complainants, more than 5,000 people have reportedly been affected, with total losses estimated at approximately THB 2 billion ($59M).

Mr. Thanakun Jitisara and Mr. Kriangkraimas Pochanasunthon, who accompanied eight of the complainants to file the report, alleged that the company misused its MVNO license issued by the National Broadcasting and Telecommunications Commission (NBTC) to promote fake investment opportunities.

Mr. Thanakun explained that while the company held a legitimate license from the NBTC to sell SIM cards and top-up machines, it operated in a manner that resembled a pyramid scheme. Investors were promised a threefold return on their initial THB 5,000 ($147) investment, amounting to THB 15,000 within 500 days. However, the company has failed to deliver returns for over two months, citing system upgrades as the reason.

Mr. Kriangkraimas raised concerns about the NBTC’s role in granting the license, which was later leveraged to solicit public investments. He claimed to have evidence suggesting financial links between the company’s executives and political figures, as well as photos of celebrities and prominent individuals attending company events.

One complainant noted that the company gained credibility by organizing events featuring celebrities and professional coaches. The business also held a high-profile launch event on August 9, 2023, which was attended by senior officials. Despite this, many investors reported being unable to withdraw their funds shortly after joining.

Another complainant revealed that he had invested THB 40,000 in the scheme and warned rural elderly citizens to be wary of investment opportunities that misuse official certifications, as they could result in significant financial losses.

It is worth noting that the MVNO license issued by the NBTC explicitly prohibits involvement in Multi-Level Marketing (MLM) activities. Although MLM businesses are permitted in Thailand, such licenses are regulated separately under the Office of the Consumer Protection Board (OCPB).

The case of K4 SIM has been raised with NBTC earlier, who said they would look into it but no decisions has been made.

The business operations of K4 Communication Co., Ltd. is divided into 2 parts:

1. K4 SIM is a MVNO service, using the type one MVNO license TEL1/2562/009, granted by the NBTC on March 4, 2019.

2. “Kathy Pansuk” a top-up machine and a top-up service which is not a telecommunications business that requires a telecommunications license from the NBTC.

The MVNO is operating via an agreement with the state owned telecom operator National Telecom (NT). At their one-year anniversary event in May 2024, the MVNO announced the investment of THB 1 billion ($29.5M) in marketing, targeting a market share of minimum 2% – or about 2 million of the total mobile connections in Thailand.

The NBTC announced on the 19th December that they have ordered K4 to stop selling its SIM cards while waiting for the results of investigations.

This order is in stark contrast to the case against TRUE, who has not lived up to its merger conditions for more than 650 days, but where the NBTC says they can’t do anything, as they are waiting for results of investigations = double standards.

Is K4’s business comparable with a pyramid or MLM scheme? Probably, and if so they will have to take the consequences once/if they are found guilty.

Has TRUE lived up to its merger conditions on onboarding MVNOs? Definitely not!

Between 2022 and 2024, K4 increased its company registered capital from THB 5 million in 2022 to THB 500 million in 2024.

From field inspections conducted according to the NBTC, it was found that some K4 service centers had locked the entrance doors. Some places had top-up machines that were not ready for use, and some did not have top-up machines at all.

It was reported that there were 15,000 selling/top-up points. The service center manager of K4 informed that they were still open for service and were selling SIM cards.

As for the issue of whether the large capital increase is unusual or not, the NBTC office has submitted the matter to the DSI, the Consumer Protection Board, AMLO, and the BOT so that each agency can take further action.