The Criminal Court on Friday dismissed a high-profile fraud case brought by customers and investors against the Daruma Sushi Japanese buffet restaurant chain.
The court found that owner Metha Chalingsuk, as well as the company that runs the chain, not guilty of public fraud, computer crime, money laundering and fake advertising, in the case that dates back to 2022.
Mr Metha, 41, was present at the court to hear the ruling.
Daruma Sushi Co was registered on Jan 12, 2016 with registered capital of five million baht. Known for its salmon buffet at low prices, the company expanded to 27 locations.
The company came under fire in 2022, after a total of 999 people filed complaints to the police. The group included 11 franchisees who had bought the rights to run a branch for between 2 million and 2.5 million baht each. The complainants demanded 42.3 million baht in damages, claiming they were defrauded by Mr Metha and Daruma Sushi Co.
The other 988 complainants were consumers who had bought vouchers for discounted dining in bulk, but were left unable to redeem them after the chain shut down on June 16, 2022 because of liquidity problems.
Prosecutors asked the court to rule on two issues: whether the defendants had committed fraud and if they had laundered the restaurant’s income.
The judges heard customers were able to use the vouchers until the restaurant began experiencing financial trouble.
However, the Russia-Ukraine war that began in early 2022 drove up prices of fresh salmon, the main attraction on the Daruma menu. Consequently, the restaurant suffered liquidity problems and eventually had to close.
Amid the pressure brought on by the business failure, Mr Metha fled the country but he later decided to return and was arrested at Suvarnabhumi airport in June 2022.
In its ruling, the court found that the defendants had no intention to deceive customers, despite having set its voucher prices very low, which the restaurant claimed was a marketing strategy to draw in customers.
Also, the court ruled the defendants did nothing to force customers to buy the vouchers, nor did it conceal facts about the restaurant’s financial situation. Therefore, the judges said, they did not set out to defraud anyone.
As well, the court found nothing amiss in Mr Metha’s finances that could prove he had laundered the restaurant’s money.
He regularly transferred money from his private bank accounts to his adoptive mother in order to care for her and to his friends to settle personal debts. He also made financial transfers overseas but they were for personal spending.
The court decided there was no credible evidence to prove the defendants had broken the law and dismissed the case.