Business and The Dictator

22 09 2018

PPT has said some things about academics, who should know better, having international conferences in Thailand.

Business, of course, is different. For all the talk of stuff like “sustainability,” “corporate social responsibility” and “human rights,” most business people really couldn’t give a fig and just look to the bottom line.

Dealing with dictators is not difficult for them, so long as a profit can be turned. Naturally enough, in Thailand, domestic business has been supportive of individual generals, coups and military juntas over the decades, and support for the current regime has been enthusiastic, not least from those who funded the PAD and then the PDRC.

Even so, The Dictator must be ecstatic to see the Forbes announcement that, and we use its words: “His Excellency General Prayut Chan-o-cha, Prime Minister of Thailand, and some 40 prominent global business leaders and entrepreneurs are confirmed to speak at the 18th annual Forbes Global CEO Conference, which will take place in Bangkok from October 30-31, 2018.”

The general “deliver a keynote address in front of an audience of global business luminaries and thought leaders” about:

the theme of ‘The World Reboots’, this year’s conference will focus on how CEOs, companies and countries are confronting challenges and seizing opportunities arising from accelerating disruption. Some liken this era to the fourth global revolution, after mechanization, mass production and digitalization. The world in 4.0 mode will affect how companies are built and led, where money is made or lost, the role of governments, and how all of us live, work and play.

That a dullard like Prayuth even consider such a topic is testing the limits of credulity, but we guess someone else will write the stuff he says.

But then again, the list of “luminaries” is hardly stellar. It includes many of the junta-loving Thai elite:

Today, Forbes announced new speakers including, Chartsiri Sophonpanich, President of Bangkok Bank; Suthiphand Chirathivat, Executive Director, ASEAN Studies Center, Chulalongkorn University and Executive Director, Central Group; William E. Heinecke, Chairman and Group CEO of Minor International; Ho Kwon Ping, Executive Chairman of Banyan Tree Holdings; Peter Moore, Chief Executive Officer of Liverpool FC; JP Gan, Managing Partner at Qiming Venture Partners; Harald Link, Chairman of B. Grimm; Goh Choon Phong, Chief Executive Officer of Singapore Airlines; Carrie Jones-Barber, Chief Executive Officer of Dawn Foods; Tan Min-Liang, Chairman and CEO of Razer; Peter Sands, Executive Director at The Global Fund; Shobana Kamineni, Executive Vice Chairperson of Apollo Hospitals Enterprise Ltd; Gary White, Chief Executive Officer of Water.org and WaterEquity; Jim Walker, Chief Economist at Asianomics Group and Parag Khanna, Managing Partner at FutureMap.

So perhaps the idea is that the Chirathivats, Heineckes, Links, Sophanpanichs are just getting their business buddies along and are paying for The Dictator’s propaganda and helping him with his election campaigning:





Bangkok Post capitulates on free expression

14 05 2018

This morning the Bangkok Post had an editorial on press freedom: “Censorship must go.”

Presumably this editorial was approved if not written by editor Umesh Pandey.

Prompted by the suspension of Voice TV, the editorial said things like:

Censorship by this regime began the day of the coup — May 22, 2014. At that time, martial law was in the hands of the Peace and Order Maintaining Command (POMC). The junta closed hundreds of community radio stations and effectively shut down all Thai broadcasting, as well as many foreign stations repeated locally. Eventually, all national broadcasters were allowed to resume, including Peace TV. Since then, the pro-Thaksin station, fronted by the top names of the red shirt movement, has been shut for various periods by the intrusive NBTC. By 2015, Prime Minister and junta chief Prayut Chan-o-cha made the unconstitutional decision to give the NBTC the power to censor and ban any radio or TV broadcaster.

Freedom of speech and freedom of the press are not in the constitution to protect parroting of the government line, repeating what official spokesman say or reprinting government or big-business press releases. Such publication and broadcast needs no protection. Extraordinary laws protecting the media and citizens’ speech are necessary to protect the opposition, dissidents and unpopular voices and views. One needn’t agree with a single word or opinion by Peace TV to disagree with government-approved decision to force it off the air.

By the time of the editorial was being read locally, Umesh was gone as editor. We are not saying that this particular editorial is the reason he’s been removed from his post. However, Umesh managed to improved the Post as editor, making it more like a real newspaper and being more critical of the junta than under his predecessor and re-establishing the Post as a newspaper that was worth reading.

Social media commentary suggests the Post’s owners and directors have been pressured by the military dictators to get rid of Umesh and this more critical reporting. Then again, perhaps the fabulously wealthy tycoon owners and directors prefer a newspaper that is junta-friendly. It isn’t the first time the Post has buckled on freedom of expression.





Corrected: The tycoons and the junta

3 06 2017

This is a corrected post. We became aware that the search function we used at Forbes to list Thailand’s tycoons returned something other than a full list. We have now located a more reliable list at Forbes and have rewritten the post based on the correct data. Thanks to a reader for questioning us about the data, causing us to go back to the source.

At the same time, we remain cautious about the data given that the totals in the global list do not exactly match those in the Thailand list.

There’s been a lot of talk about the military dictatorship having done little for the economy. One group is benefiting. That’s the junta and its allies in state enterprises, those on the take, those raking in commissions and the various puppet appointments. But their takings, while huge by the standards of the average Thai, are not the measure of how the tycoons are doing.

That group are the richest Thais, mostly the Sino-Thai tycoons and a couple of foreigners who have made their fortune in Thailand.When we had the wrong data, we indicated that the wealth of the top 10 had decreased. This is corrected in the table below, showing a very large increase in wealth.

We know this from the listing in Forbes of the world’s US dollar billionaires and, now, from the list of Thailand’s billionaires. Over the years, we have listed the top 10, so we are sticking with that so that a comparison can be made.

The table compares 2014 wealth (Forbes 2015) and the year of the coup and the 2016 figures (Forbes 2017).

The totals for the top 10 show that their combined wealth has increased by almost $16 billion. The top two families have increased by more than $9billion.

When we had the data wrong we asked: How long will these economic whales put up with a military dictatorship that delivers economic decline? Now that the data has reversed the position, we can only imagine that the tycoons are loving the junta.





Updated: Panama papers II

6 04 2016

We continue to look for data on Thailand in the Panama Papers. So far we aren’t having too much luck. We were, however, reminded of an earlier report of some 600 Thais stashing loot overseas.

That 2013 report, also from the International Consortium of Investigative Journalists, included Pojaman Shinawatra, Nalinee Taveesin, Bhanapot Damapong, members of the Chirathivat family, Yuenyong Opakul, and note this very carefully, the Vongkusolkit family and Admiral Bannawit Kengrian.

The latter was described as “the former deputy permanent secretary of defense, who is listed as one of many shareholders in the British Virgin Islands company Vnet Capital International Co., Ltd in 1998” with 2006 coup connections and who is described in a Wikileaks cable as an acolyte of Privy Council President General Prem Tinsulanonda.

On the new release of leaks from Mossack Fonseca, the main new report we have seen was in the Bangkok Post. It states that the “Office of the Auditor-General has weighed in on the so-called Panama Papers, asking the Revenue Department to look into tax payment records of Thai nationals named in a list of people allegedly using a Panama-based law firm for offshore holdings.”moneybags 1

Yet, as might be expected in a country that is protective of its wealthy elites and ruled by a military junta, a cover-up seems likely, unless the junta can come across the names of those it sees as political opponents. At the moment, “Justice Minister Gen Paiboon Koomchaya and the business community are urging the public not to rush to conclusions and let regulators verify the information first.”

“Verify” sounds like “cover-up” or “manipulate.”

Like the rich everywhere, the first bleat refers to law rather than ethics: “… using offshore company structures is a normal and legal business practice.” Not paying tax is legal they say. In Thailand, tax, like so many other things, is malleable and politicized.

Recall that Thaksin Shinawatra’s sale of the Shin Corp involved tax havens. While he didn’t have to pay tax on the transfers in Thailand, there was an outcry over this, and the opposition to him was strengthened. Now, it seems, things are to be reversed. So much for Buddhist ethics and the “good” of “The Good People.”

The report says there are “almost 400 Thais among 780 individuals who used Thailand as a residence and 50 companies were named on the lists.” While it is stated that “[p]rominent names include well-known business people, politicians, a former military officer and celebrities…”, only a few names are named.

As the International Consortium of Investigative Journalists (ICIJ) observes, “there are legitimate uses for offshore companies and trusts and it does not intend to suggest or imply that those named in the leak have broken the law or otherwise acted improperly.”

General Paiboon said “… the leak is not verified information. But once it’s verified, no one can dodge an investigation. So let Amlo [Anti-Money Laundering Office] work on this first…”.

Our question is: Where are Thailand’s journalists who should be working on this? In most other countries, journalists are pouring out stories.

Auditor-General Pisit Leelavachiropas says “he has seen the list and had proceeded to ask the tax authority to review tax records to detect any possible wrongdoing.” He names no names.

Pisit also suggested that the “Centre for National Anti-Corruption (CNAC) can facilitate the probe by acting as a coordinator as it is the hub of 11 anti-corruption agencies.” Some of this group and Pisit were recently part of another cover-up, finding no corruption in the military’s Rajabhakti Park, while making “commissions” acceptable.

Now to some of the names and what they say.

Isara

Isara

One name in the Panama Papers is Isara Vongkusolkit, who is chairman of the Thai Chamber of Commerce. His response was to say that “he did not know and had noting to do with Mossack Fonseca. He was wondering how his name was mentioned on the lists.” Wondering? Really? He doesn’t remember the 2013 report?

He did admit that offshore banking and companies were necessary to avoid taxation in Thailand. He then went on to blame government for tax avoidance because it has had “high” tax rates!

The Vongkusolkit family maintains a tight set of relationships. One Chanin Vongkusolkit is a member of the Council of the Private Sector Collective Action against Corruption (CAC), which is:

an initiative by the Thai private sector to take parts in tackling corruption problem via collective action. The CAC aims to bring effective anti-corruption policy and mechanism into implementation by companies in order to create an ecosystem of clean business community.

Forbes says this of Isara and family:

To offset volatility in sugar prices, Isara Vongkusolkit’s privately held Mitr Phol Sugar, Thailand’s largest sugar producer, is expanding its energy business, which generates 400 megawatts of electricity, half for its own consumption. The company, which recently faced allegations of human rights abuses and illegal land- grabbing in Cambodia, said it was in discussions with the Cambodian government about its concessions. Brother Chanin stepped down as CEO of family’s Banpu, the country’s biggest coal miner, after running it for more than 3 decades.

Chanin remains on the Banpu Board of Directors. Others from the family on the Board are Buntoeng and Verajet Vongkusolkit. Australia’s controversial Centennial Coal Centennial is a wholly-owned subsidiary of Banpu.

Banpong

Banpong

The point seems to be that Isara and his family are fabulously wealthy Sino-Thai tycoons and like their ilk everywhere, seek to “minimize” tax while claiming to engage in ethical business behavior, if that is not an oxymoron.

Another listed is “Banyong Pongpanich, chairman of Phatra Capital and a member of the State Enterprises Policy Commission, posted a message on his Facebook page saying he was taken aback that his name was on the list.” Like Isara, he claims to not know Mossack Fonseca: “I have just learned of the company today and I never contacted or did any business with Mossack Fonseca…”.

Schultz

Schultz

We are reminded of Sgt. Schultz, again and again. How many times can “I know nothing” be used?

Patra Capital is a “certified” company at the Private Sector Collective Action against Corruption and Phatra Capital promulgates a Code of Ethics for Directors, Officers and Employees. In part, it states:

By adhering to exemplary standards and conducting our business with excellence and integrity, we enhance our reputation and cultivate the growth of our business. All of us must take personal responsibility for conducting ourselves in a way that reflects positively on the Capital Market Business Group and with the letter and spirit of the Guidelines for Business Conduct.

Like many of Thailand’s tycoons, Banpong has royal links, his with the Mae Fah Luang Foundation. He is also a member of the junta-created Superboard, which is said to be “overseeing all state enterprises has the stated aim of getting them all moving in the same direction towards strength and efficiency.” A Superboard of bankers, coal miners and more means endless conflicts of interest.

Both the Vongkusolkit and Pongpanich families are represented on the Board of Trustees of the royalist Thailand Development Research Institute, which has often commented on corruption and ethics in Thailand’s politics.

Bannawit

Bannawit

The last Sgt. Schultz excuse came from Admiral Bannawit Kengrien. The “former deputy defence permanent secretary, whose name is also on the lists, said this came as a surprise to him…. According to the retired officer he never conducted any business transactions overseas or given permission to anyone to use his name to set up offshore accounts.”

Bannawit has appeared previously at PPT as one of “Dad’s Army,” which was an elite forerunner to the more popular People’s Democratic Reform Committee in trying to bring down the elected government of Yingluck Shinawatra. He was a member of several other yellow-shirted and royalist groups that sought to create conflict with the Yingluck government. Earlier, he was previously a member of the assembly appointed by the junta in 2006 and then caused controversy when deputy defense minister. He was not averse to very odd and racist claims when opposing red shirts.

Bannawit also seems to have conveniently forgotten the 2013 leaks from the British Virgin Islands. Or perhaps the rich and powerful expect the junta to enforce collective amnesia on the country.

Update: Khaosod has cast doubt on the Bangkok Post story, above, saying that the newspaper (and many others) confused the 2013 leak with the Panama Papers. INterestingly, whether its 2013 or now, nothing in our post would seem in need of change.





Rich still doing very well

6 06 2015

Forbes has published its latest Thailand Rich List. There are no real surprises for the mega-rich in Thailand continue to do well through political instability and military coup. The ranking of Thailand’s 50 richest is available from Forbes.

CP’s agribusiness tycoon, the aging Dhanin Chearavanont, is the country’s richest man with a net worth of US$14.4 billion. Next is beverages and land tycoon, Charoen Sirivadhanabhakdi,with a net worth of $13 billion. moneybags

The list does not include the monarchy, which is covered in another Forbes listing. The monarchy’s combined wealth, which is mostly managed by the Crown Property Bureau, is variously estimated at $40-50 billion. This is equivalent to the total combined wealth of the top 3-4 tycoons in this Forbes list.

Most of those on the list have close connections to the palace, although they are big enough to split their bets when there is political agitation. As we noted last year, since 2011, the assets of the mega-rich have increased very substantially, and this has continued in this listing.

Thaksin Shinawatra and his family ranked 10th, as they were in the last listing, with the same combined assets:

Dhanin Chearavanont; US$14.4 billion
Charoen Sirivadhanabhakdi; $13 billion
Chirathivat family; $12.3 billion
Chalerm Yoovidhya; $9.6 billion
Krit Ratanarak; $4.7 billion
Vanich Chaiyawan; $3.95 billion
Santi Bhirombhakdi; $2.9 billion
Prasert Prasarttong-Osoth; $2.8 billion
Vichai Srivaddhanaprabha; $2.5 billion
Thaksin Shinawatra; $1.7 billion

Forbes states: “This list was compiled using shareholding and financial information obtained from the families and individuals, stock exchanges and analysts, the Stock Exchange of Thailand and regulatory agencies.” It is not clear whether it includes land holdings.





No populism here II

4 10 2014

Populism under Thaksin Shinawatra, at least when he was first elected in 2001, was very popular. As the Asian financial crisis lingered and as the Democrat Party-led government fumbled recovery and did the bidding of the IMF, the struggling rich saw Thaksin as a political savior. His reflationary “populism” boosted consumption. Of course, as he became more popular, many of the Sino-Thai tycoons went back to their “natural” habitat, tying themselves to the military’s boots and the boostering for the palace.

When PAD and then the anti-democrats associated with the Democrat Party were on the streets opposing “populism,” many of the big Sino-Thai capitalist class threw their money behind them. They cheered the two military coups in 2006 and 2014.

It can be no surprise, then, to read in the Bangkok Post that the “nation’s business tycoons are being urged to help play a crucial role in stimulating the country’s economy in order to restore foreign confidence in Thailand.” Some of the business whales attending a friendly meeting with the General masquerading as Commerce Minister to celebrate the military dictatorship included:

Business leaders including Dhanin Chearavanont, chairman of Charoen Pokphand Group, Charoen Sirivadhanabhakdi, chairman of Thai Beverage, and Tos Chirathivat, chief executive of Central Group, and Vathit Chokwatana, director of Saha Group. These are the most powerful capitalists in the country.

The General, not to be confused with The Dictator, said “the government had called on the tycoons’ cooperation in the government’s reform attempt as well as to boost the quality and add value to Thai products.” It was reported that they also “discussed strategies to restore the confidence of foreigners in Thailand and the Thai economy and how to boost the country’s trade and investment.”

Not coincidentally, the military dictatorship undertook some payback: “The government [it means the junta] also pledged to accelerate amending more than 20 existing laws and regulations that are deemed obstacles to trade and business.”

Sounding like a member of the Chinese Politburo, the General chortled about the great success of getting his business allies to a meeting: “The meeting also marks a new dimension, as the business tycoons agreed to join the meeting and offer their valuable opinions.” He triumphantly declared that the “private sector is also patriotic. The business leaders agree with the government’s efforts and are ready to team up with the government sector to improve the country and the economy…”.

The General claimed that the big capitalists “agreed with the government’s new economic stimulus packages while suggesting the government let market forces work in handling farm prices.”

Naturally, the commercial capitalists at Saha and Central will be pleased with the junta’s economic stimulus.

Tos Chirathivat was happy. He said the “joint meeting between the Commerce Ministry and business leaders was a good start to underlining cooperation between the government and the private sector.”

Giant capitalist and huge landowner Charoen “agreed, saying closer cooperation and connectivity between the private sector and state bodies would streamline the private sector in running their business, eventually helping to raise the quality of life of low-income earners.” He probably means his drivers, gardeners, maids and other servants.

We said the military junta was proposing populism for the middle class. It seems that the coup is for the rich too.





I want more!

22 06 2014

One of the major complaints made by red shirts in their campaigns for elections in the 2008 to 2010 period was that the amart was a powerful group that defended the status quo and refused to provide any political openings for those who wanted more representation of their interests.

pyramidThe amart was never particularly well defined. It was the elite, the royalist elite, the network monarchy, Sino-Thai tycoons and so on. When rhetorical push came to political push, sometimes the links between the (Sino-Thai) monarchy and Sino-Thai capitalists were made, and there were attacks on corporations such as the Bangkok Bank.

More recently, when Suthep Thaugsuban’s anti-democrats were on the streets, there were several articles that made connections between him, his movement and tycoons. While Suthep may have attacked nepotism and cronyism that he alleged were features of Thaksin Shinawatra’s clan, it is evident that Suthep was doing the work of big clans and networks that had greater longevity than Thaksin’s lot.

There have been various mappings of the group known as the Sino-Thai business class and its networks.

The Sino-Thai rich have long been required to demonstrate their political loyalty by writhing about at te feet of the royals, offering them buckets of money and swathes of land. The royalist Democrat Party also collects loot from the rich and is the tycoons’ preferred party, if they must endure party politics.

Of course, there are various measures of the huge troughs of money that accrue to the amart through its political and economic dominance. The obscene wealth of the royals has also been detailed as well as the huge handouts the monarchy gets from the taxpayer.

Charoen

Charoen Sirivadhanabhakdi

Until a recent report at the Bangkok Post, however, we had never seen a listing of landholdings. There, it is the alcohol tycoon Sirivadhanabhakdi family that is listed as owning the most land in Thailand, with 630,000 rai. PPT is never the best with calculations, but we think that’s nearly 101,000 hectares or about 1,000 square kilometers. One might be tempted to observe that that’s a small amount of Thailand’s land area, but it is about the size of the Hong Kong S.A.R.. The family has “a 12,000-rai plot in Cha-am, Phetchaburi province, and a 15,000 rai plot in Bang Ban, Ayutthaya province.”

That beer and whiskey family is followed by the telecoms, shopping mall and hotel-owning tycoons, the Chirathivat family, with 200,000 rai. That family held a prize “10,000-rai plot in Ayutthaya.”

The Crown Property Bureau is said to be fourth, with “just” 30,000 rai. That’s about the same as was reported in 2005. Given that a significant portion of this is in the highest value areas of Bangkok, the returns are pretty chunky.

The report states that there were just “837 individuals and juristic persons [that] had 1,000 rai or more…”. The vast bulk of landowners in Thailand own very small plots. Inequality in incomes is matched by vast inequalities in land ownership.