POLICE in Finland are investigating allegations that two men have defrauded investors of millions of euro in a scheme involving a Phuket nightclub and palm oil.

The financial crimes unit in the Finnish city of Tampere is currently investigating the case as one of ''aggravated fraud,'' newspaper reports say.

In March 2008, a Tampere man invested 200,000 euros to help bankroll a night club in Phuket. However the funds were allegedly paid directly into the personal accounts of the subsidiary's director, the newspapers in Finland report.

According to another media outlet, the two men collected around five million euros in investments for a night club and palm oil production in Thailand, promising 900 percent returns.

Between 200 and 250 investors were involved, the reports say. First accounts of the alleged ''sting'' were carried in Thursday's edition of the Aamulehti, a daily newspaper based in Tampere, Finland's third largest city.

The reports name two companies, but no individuals, and specify the Phuket nightclub as ''Babylon.'' At this stage Phuketwan is not aware of any connection with the Babylon Beach Club, a popular island restaurant at Bang Tao.

A report in the international edition of Helsingin Sanomat, Finland's largest circulation daily, says: ''The promises were wild. From the palm oil business the firm's calculations promised profit per hectare that was up to ten times higher than the trade average.

''For investments into the Babylon night club, the company promised 45-60 percent returns already for the first year.''

The report says ''Gullible investors were promised vast profits in no time'' and adds that police are investigating the Finnish-led investment firm on ''two separate fronts.''

A link on the website of one of the companies named in the report promotes the state of property on Phuket with a newspaper article ''TOURISM DRIVES BOOM TIME By Somluck Srimalee, The Nation Published on May 2, 2008'' cut and pasted under the company's letterhead.

The article names reputable Phuket brands, including Trisara, Surin Hill Development, West Sands, the Bay Cliff Company and Centara Karon. As informed investors are aware, the outlook and performance of both tourism and property on the island has varied markedly since May 2008.

Phuket and Thailand are popular destinations for Finns with almost 5000 Finns arriving at Bangkok's Suvarnabhumi airport this September alone, an increase of 16 percent over the previous year.

The attraction of the warm weather along the Andaman coast for Europe's cold-climate Nordic nations is not new. More than 180 Finns were among the 5400 victims of the 2004 tsunami in Thailand.