Another royal money move

Reuters reports that “Thailand’s king now has a stake worth nearly $150 million in the country’s biggest industrial conglomerate, Siam Cement Group Pcl, according to stock exchange data, while his close aide is in line for a board seat.”

As background, readers might recall that it was last October that it was reported that the Crown Property Bureau’s shareholding in Siam Commercial Bank suddenly declined by 3.33%, amounting to about 17 billion baht. It was then reported that these shares had been transferred to King Vajiralongkorn from the Crown Property Bureau.

The latest move on Siam Cement followed the same pattern: “The 0.76 percent stake in the king’s name in Siam Cement was acquired on Feb. 8 while there was a matching reduction in the stake of the Crown Property Bureau, which manages palace assets…”.

In total, the shares previously held by the CPB and now transferred to the king’s portfolio amounts to about $690 million. These holdings would produce a “dividend yield [of]… more than $25 million per year.”

The report continues by commenting on the secretiveness of these transfers: “The terms of the transfers have not been disclosed in public. Neither company nor the Crown Property Bureau would comment on them…. The palace has a policy of not commenting to media.”

The CPB remains the largest shareholder in Siam Cement, holding 30% of the company.

Since taking the throne, outside the CPB, the king has become “the 15th largest shareholder in Siam Cement and the sixth biggest in Siam Commercial Bank…”.

At Siam Cement, “Air Chief Marshal Satitpong Sukvimol, a close aide to the king who was made director general of the Crown Property Bureau this month, is recommended for a board seat at a March 28 annual general meeting.”

Satitpong, 69, has been responsible for managing the king’s personal affairs and assets for some time. He reportedly “became personal secretary to then-Crown Prince … Vajiralongkorn in 2005, and served on the board of national flag carrier Thai Airways International from 2009 to 2013.” The then-prince had a long relationship and “position” with Thai Airways, as well as having a personal  interest in several women with the airline.

The SCG annual report for 2017 (clicking downloads a PDF) lists former CPB boss Chirayu Isarangkun as a director of the company since 1987 until 1999 and then since 2007. The board is a coterie of old royalists, with an average age of 72. Of the 24 listed as directors and management in the company, only one is a woman. A look through the CVs of the directors reveals that most have long royal links and serve on other royal-owned companies, including those making, managing and investing the personal wealth of Vajiralongkorn and Sirindhorn. Details of retirements and nominations for the SCG Board can be downloaded as a PDF. According to this document, Chirayu will remain on the Board.

Speculation about the reasons for the king needing to control large personal stakes in two of Thailand’s largest listed companies is rife. One reason suggested is his lavish lifestyle and the need for cash rather than relying on the CPB, although the king now has more or less personal control of the CPB. Another suggestion is that he plans grand palace construction in the expanding royal precinct.

The various reports note that the CPB remains huge. The usual estimate of its assets is around $30 billion. But that’s a figure Forbes came up with back in 2011. Yet an earlier estimate by an academic came up with more than $40 billion in 2005. Since then Thai shares have performed reasonably well and land prices have increased substantially.  Our guesstimate is that the CPB, if it has done as well as the rest of Thailand’s wealthy Sino-Thai tycoons, should now be valued at between $50 billion and $70 billion. (It is possible that the CPB has been underperforming, but its operations are a secret, as is its worth.)