The Revenue Department is to investigate all tax payments related to the auction of assets of 56 defunct financial institutions by the Financial Sector Restructuring Authority (FRA) in August 1998.

Revenue officials will investigate whether tax was paid correctly on the transactions and whether Global Thai Property Fund, managed by Lehman Brothers, should have been subject to tax, department director-general Sanit Rangnoi told reporters yesterday.

The move follows the Department of Special Investigation (DSI) decision on Thursday to summon former FRA secretary-general Vicharat Vichitvadakan over a charge of assisting Lehman Brothers to evade tax on assets it purchased at the auction.

Lehman Brothers won bids for Bt11.52 billion out of a total of Bt24.62 billion of corporate loans, with property as collateral, put up for auction by the FRA.

It then transferred the rights to Global Thai Property Fund.

According to the DSI, Vicharat helped Lehman Brothers by delaying the signing of the contract for seven days to give the company time to establish the mutual fund and thereby evade tax payments.

The DSI said it would summon Vicharat to hear the charge on February 22, and representatives of Global Thai Property Fund and Lehman Brothers on February 23 and 26, respectively.

It also plans to ask Amaret Silaon, FRA chairman at the time of the auction, to give testimony in order to make the investigation more complete.

Meanwhile, Lehman Brothers yesterday insisted that it had complied strictly with all legal and regulatory requirements related to the auction.

"With regard to the firm's involvement with the auction of assets under the FRA in 1998, Lehman Brothers has done absolutely nothing illegal or unethical and will vigorously defend itself against any and all allegations to the contrary," the firm said in a statement.

"The closure of the FRA transaction of August 1998 into Global Thai Property Fund, a fund established by Lehman Brothers, was totally legal and in full compliance with laws established by the Securities and Exchange Commission in May 1998," it said.

Lehman Brothers said it had cooperated fully with the ongoing DSI investigation, including arranging full and comprehensive access to its executives, support staff and records to all relevant authorities.

Lehman Brothers was one of several foreign investors, including hedge funds, that bought problem assets from local financial institutions at low prices after 56 finance companies collapsed following the 1997 economic crisis. Others included US-based financial firms GE and Goldman Sachs.