Their Thai-Sweden Children's Foundation solicited millions of baht in donations from Swedes, then allegedly used the funds for other purposes.

The orphanage, which received foundation status on March 18, 2005, with initial funding of about Bt550,000, is located on land donated by Wat Muang Mai in Tambon Mai Khao, Thalang.

The alleged fraud has been frontpage news in Swedish newspapers.

One paper, Expressen, quoted investigation chief and Phuket Deputy Governor Nivit Aroonrat as confirming that the foundation was being probed.

Expressen claims the controversy led to the cancellation of a visit to the orphanage by Sweden's King Carl XVI Gustaf and Queen Silvia during their recent visit to Phuket.

Narin and his wife moved to Phuket several years ago and began developing property aimed at Swedish buyers. Work on the property was almost complete when the tsunami struck in December 2004.

The couple offered temporary housing to Swedish victims of the disaster and were portrayed as heroes by the Swedish press, Expressen reported.

The couple announced their intention to open an orphanage in January 2005 and sought donations from Swedes.

According to the foundation's financial report, more than Bt20 million was collected.

Some Swedes who made donations to the orphanage and visited the home asked Expressen to investigate rumours of financial impropriety, and claims that the children at the orphanage were not tsunami victims.

However, Yalinee Saisikosol, who has been an administrator with the foundation for two months, said initially the orphanage had many tsunami-affected children, but the number had dwindled as the economy began to improve and relatives came to claim them.

"We spend about Bt20,000 a week providing three meals a day, paying school fees, transport and covering expenses of our employees and volunteers. Sometimes there are additional costs, such as when we take the children out for a day at the beach," she said.

The provincial investigation is looking into the foundation's finances. Last week, it inspected buildings at the site to see if construction costs had been inflated.

Nikorn Torhirunyapreuk, chief of the Phuket Provincial Defence Office and a member of the investigation, said that although the panel was still gathering information, it intended to try and have the orphanage's foundation status revoked.

Prosecutions may follow, he said.

"We know the foundation has only two children there who were affected by the tsunami. Another 10 children were brought in from Isaan, which is different from the stated objective of setting up the foundation.

"As they have only two children there [full-time], why did they need to buy so many pickup trucks? We are checking on this now," he said.

"From our initial investigations and after two rounds of questioning with Narin, we believe there has been some dishonesty. We asked him for information regarding the construction of a sala that should have cost Bt500,000 to build, not Bt2 million.

"Narin told me that it is still unfinished. But if that is the case, why did he pay the contractor in full six months ago? According to government regulations, payment for construction should not have been made until the work was complete.

"We have to investigate this further, including questioning the contractor and looking into tax records," he said.

The committee is also inspecting the foundation's other expenses, including Bt1,500 a day for meals.

There are also allegations that donations were transferred to six different bank accounts, but the foundation listed only two.

Nikorn said that while the two foundation accounts show about Bt20 million in donations, the actual amount might be much higher.

"It would be good if we could gather all the receipts issued to donors, so that we can learn how many bank accounts were used and how much was collected," he said.

When the Gazette tried to contact Narin on June 26, a man identifying himself as a cousin said Narin had gone abroad "to relax". Neither did Narin respond to emails.

Orphanage staff told the Gazette that Narin had resigned as director last April, but continued to direct the foundation in a caretaker capacity.

Staff said the orphanage currently has 21 children, four or five of who were tsunami victims. The others were children of construction workers whose parents had no time to care for them, they said.

The foundation's registration documents list six objectives, but only the first two mention the tsunami. Others include the teaching of Buddhism and giving scholarships to underprivileged students.

However, the foundation achieved high-profile status in Sweden - collecting millions from high-society donors - by promoting its work with tsunami orphans.

The orphanage has three buildings, which house an office, 10 bedrooms and housing for children whose parents work there. There is also a canteen and a playground.

Administrator Yalinee admitted that "government officers are scrutinising our foundation, but I think all of this is the result of an attempt to smear us". "It may be the result of a personal problem with a member of the foundation's committee, which is being blamed on the foundation in general," she added.