When the Democrat Party was the Army’s surrogate ruling political party it often alleged that business deals done by Thaksin Shinawatra and his various governments wreaked of cronyism. There was certainly some of that.
But of course, so does the Democrat Party smell on these things. Worse, it had an enormous credibility problem in its arranged marriage of coalition parties with yet another Army crony party, Bhum Jai Thai. That party managed a range of crony relationships while in government. In order to stay in power, the Democrat Party was complicit in a range of cosy deals.
One that has recently come to light is reported at the Bangkok Post. In this report, Information and Communication Technology Minister Anudith Nakornthap has intimated that:
True Corp’s 3G network deal with state-owned CAT Telecom has been found to have been tainted with irregularities which could result in the 6 billion baht agreement being scrapped….
The True-CAT network deal was signed during the Abhisit [Vejjajiva] administration, and through True’s purchase of Hong Kong company Hutchison’s (Hutch) operations in Thailand, gave True the right to use the Hutch network and to aggressively market 3G wireless while “its major competitors _ Advanced Info Service (AIS) and Total Access Communication (Dtac) _ are still awaiting a decision on whether there will be a 3G licence auction this year.”
The ICT made “five points in its investigation of the True-CAT contract that raised questions about the legality and legitimacy of the deal” that were listed by Anudith:
First, the “panel found there had been an indirect political instruction on April 7, 2010” when former ICT minister Ranongruk Suwunchwee under Abhisit “for CAT to buy Hutch’s network in 25 provinces in the Central region from Hutch. Under a later ICT minister for the Abhisit government, Juti Krairiksh, the CAT-Hutch deal collapsed. “The collapse of the CAT-Hutch deal enabled True and CAT to enter quickly into a deal under a new business model drawn up by True and the state firm.” The contracts were “rapidly signed” on 26 January 2011.
Second, “CAT had bypassed the cabinet and the National Economic and Social Development Board (NESDB) in terminating the CDMA mobile service in 25 central provinces with Hutch and its affiliate to enter into the new deal with True.”
Third, “CAT had violated the ICT Ministry’s work procedures in going ahead with the deal with True.”
Fourth, CAT didn’t consult the NESDB and the Council of State as required following “the go-ahead for its request to enter into a business deal with True on Dec 28, 2010.”
Fifth, CAT “asked the ICT to scrap the state enterprise’s original CDMA investment plan, and it switched to a new rental equipment agreement with True worth 12 billion baht.” It is stated that “CAT had no authority to enter into the new agreement. It could also be a violation of the 1992 Public-Private Joint Venture Act, which requires scrutiny of any public-private venture worth more than 1 billion baht.”
Not unexpectedly, True has “denied any wrongdoing.” The company’s vice-chairman Athueck Asvanund, said “the ICT report did not identify any specific points in the contract that violated the law.” he added: “The issues raised are political…”.
While PPT knows little about all the technical material, since the True representative raises “politics,” it is probably worth looking at this a little more. At True’s website, the company describes itself in this manner:
Backed by Asia’s largest agro-conglomerate, the Charoen Pokphand Group (“CP”), with a shareholding of 30.02% as of December 2007, True has expanded its business from being a fixed-line provider to a total communications solutions provider, offering consumers, small and medium enterprises, and corporations a full range of voice, video and data services in solutions customized to meet their needs. We are Thailand’s largest provider of Internet, consumer broadband Internet and pay-TV services, as well as the largest fixed-line service provider in the BMA, a leading online game provider and the number three mobile phone operator in Thailand.
True’s board, apart from being dominated by the Chearavanont family and a swathe of directors with long links to CP, includes some significant family names: Vejjajiva, Tulanonda and Srisa-an.
The Vejjajiva link is interesting, especially as Vitthaya Vejjajiva has a link to the Bangkok Post and projects like this one that brings together major royalist groups:
The project is advised by Visanu Krue-ngam (chairman), Borwornsak Uwanno, Tongthong Chandrangsu and Vitthaya Vejjajiva. It is sponsored by Bangkok Bank, the Central Group, the Foreign Affairs Ministry, Jim Thompson, PTT, the Crown Property Bureau, Ch Karnchang Plc, Bangkok Expressway Plc and Thai Tap Water Plc.
True is part of the sprawling, patriarchal giant of a conglomerate known as CP, which at its website states it has:
businesses and affiliates operating within the agribusiness, retail and telecommunications markets, we currently employ over 250,000 people whom conduct our investments, operations and trading at factories and offices worldwide. Our sales at the end of 2010 were USD30 billion.
CP has three companies listed at the Stock Exchange of Thailand: True, Charoen Pokphand Foods and CP ALL. Directors at the latter two companies add to the significant names: Asa Sarasin is probably the most notable, as the king’s Principal Private Secretary, and mentioned in several Wikileaks cables around the time of the 2006 coup. Another is Police General Kowit Wattana, a Puea Thai big shot associated with the royalist Village Scout movement, who stepped down from CP when he became Deputy Prime Minister in the Yingluck Shinawatra government.
The point is that CP is very well connected. Most of its links, Kowit not withstanding, are with the royal establishment. In line with this, one website notes this for Privy Council President General Prem Tinsulanonda, saying he:
… has served as a director and advisor for numerous large Thai companies. In early 2007, he resigned as chief adviser of the Charoen Pokphand (CP) Group in order to distance himself from a junta-led corruption investigation. The investigation concerned alleged bid rigging in a para rubber saplings supply contract granted during the Thaksin government when Prem had still held his position in the Group.
The resignation refers to the case – eventually dismissed – that involved Thaksin Shinawatra minister Newin Chidchob, who had flipped his support to the Democrat Party in 2008.
In this political context, was the deal done by the Abhisit government an example of cronyism?
Update 1: A regular reader has sent us two links that seem highly relevant for this post- see here and here. That the king receives Dhanin Chearavanont and other CP executives who are handing over money to be used at the royal pleasure is significant the task of gathering the money is usually assigned to other members of the family. The recognition that Dhanin deserves an audience with the king is exceptional and carries great meaning. The royal news at ASTV is also worth watching as it is something of a record at almost 37 minutes and after the king, features the women of the court on royal travel and others doing their local duties.
In addition, that reader points out another potential link to our post in the recent Democrat Party attacks on Minister Anudith, seeking to have him investigated for “unusual wealth.” Is this a pre-emptive strike against the minister?
Update 2: Another regular reader points out that in listing the Vejjajiva connection with CP, we should have pointed out that Abhisit’s father, Athasit, is a board member at CP Foods (see link above).
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