Keeping tycoons with the junta

6 08 2018

We have posted a lot on the military junta’s campaigning and not enough on how The Dictator maintains his relations with the Sino-Thai tycoons.

Fortunately, the Bangkok Post has provided some insights on this process.

Before getting to that, however, a reminder of how well the really rich have done under the junta. A while ago we compared 2014 wealth – the year of the coup – and 2016 wealth. The totals for the top 10 show that their combined wealth has increased by almost $16 billion over that period. The top two families have increased by more than $9billion. Not bad pickings.

More loot awaits: “Activists and workers’ unions have demanded land development plans be immediately excluded from the terms of reference of the high-speed railway set to link Don Mueang, Suvarnabhumi and U-Tapao airports, alleging it would monopolise involvement in the megaproject down to ‘a few large firms’.”

Activist Srisuwan Janya said granting land rights to the firm that wins the rights for the Eastern Economic Corridor (EEC) railway project is “unnecessary.”

What’s necessary is throwing out infrastructure projects that produce great wealth for the big conglomerate that wins – we would bet on a CP or a Charoen Sirivadhanabhakdi being involved. Based on previous experience, we might also expect that some bureaucrats and political leaders will also benefit.

Those funds lubricate a whole 1980s-like political system, dripping corruption.

In this case, the winning firm gets “both operation and land development rights under a 50-year concession.” That’s after the 200 billion project is completed.

Srisuwan explains: “These firms will just be receiving the land around the railway as an added bonus at cheaper rates, compared to the actual, substantially higher value of such land.”

The reports adds that the State Railways “must hand over the land it owns around the Bangkok-Rayong route to the winning firm, including 150 rai in the Makkasan area.” That’s smack bang in central Bangkok and a prime piece of real estate worth billions of baht.

That’s ample lubrication.





Junta learning from China

31 10 2017

Over the years, there have been efforts to suggest that various Thai leaders in politics and the economy have turned to China in part for reasons of ethnic loyalty. Certainly, several Thai leaders have been of Chinese extraction and some Sino-Thai tycoons at CP and the Bangkok Bank (to name just two) have been early and long active in “giving back.”

But what does this mean in practice, especially when China’s economic rise has been noticeable for decades and its political sway has been increasing for some time? And, consider that almost all of Thailand’s wealthiest, including the dead king, were Sino-Thai. Chineseness has seldom been a hot political issue since Phibun’s time and a period when the OSS/CIA were worried about the “overseas Chinese” as a “fifth column” for Chinese communism.

The most recent effort we can recall was by Sondhi Limthongkul, in some accounts claimed to be China-born and the son of a Kuomintang general. Back in the days when the People’s Alliance for Democracy – dominated by Sino-Thais of the Bangkok middle class – declared that they too were loyal to the nation (and the monarchy).

When we look at the current military dictatorship, for some time shunned by the U.S. and by some major countries in Europe, the draw of China became important. While on a well-worn path, where China was already a major trading partner, the significance of China rose substantially for the regime as it sought to arm and boost the economy. But one of the attractions does seem to be, as one academic has it, mutual authoritarianism.

But we don’t think we have ever seen such an enthusiastic embrace as that provided by the junta’s 4th generation Sino-Thai Wissanu Krea-ngam in an interview with the official Xinhua news agency on the day the 19th National Congress of the Communist Party of China concluded.

Speaking of the amendment to the CPC Constitution that made “Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era a new component of the party’s guide for action,” Wissanu was enthusiastic, declaring:

Xi’s thought makes “Chinese characteristics” more prominent, the Thai deputy prime minister said.

He praised China for being very good at accomplishing its goals efficiently as can be proved by the anti-corruption campaign that started five years ago.

He said he believes that the new goals set at the 19th CPC National Congress will be accomplished as before.

“The Chinese set long-term goals and ask people to do it together. That is something we can learn from, as we are also working on a 20-year national strategy to guide the development of Thailand,” Wissanu said.

“It is just magical that we have consistent policies or strategies as China put forward the Belt and Road Initiative. We have Thailand 4.0 and ASEAN … has ASEAN Connectivity,” Wissanu said, adding that China and Thailand can still find a lot of aspects to cooperate in the future.

Maybe he’s just noticing economic opportunities? But those have been evident for decades. Wissanu seems attracted by the Chinese model of marrying authoritarianism with markets. That seems pretty close to the junta’s aims.

 





Taxpayer-funded royalism

30 06 2017

The effort to “regularize” the junta’s irregular approval of to push through that tower mega-project (worth about half of a Chinese submarine, depending on the price quoted by the Treasury Department), have quickly deteriorated to claims about monarchy, as we predicted.

Prachatai reports that the earlier claims about income and tourism have quickly been ditched. The Treasury Department “has clarified that the controversial 4.62 billion baht Bangkok Observation Tower project is a public-private partnership project to honour the late King Bhumibol.”

That should stop all criticism.

Even if Finance Minister Col Apisak Tantivorawong has said that the Treasury Department will only get 70 million baht from a 30-year lease from the Bangkok Observation Tower Foundation, “which is much lower than the market rate for land in the area,” that’s okay, because this project will “honour the late King Bhumibol.”

Even if the minister “clarifies” that there’s no open bidding because “[i]f it was open for bidding for private developers, no one might be interested because the value of the project is quite high. Also [we] don’t know whether it will be worth the investment,” that’s okay because “[t]he top [of the tower] is for an exhibition about the scientific work of the [late] King.”

(We will leave aside the claims of “science” associated with the dead king.)

Even if the Treasury Department “clarifies” that “the project is social not commercial,” that’s okay because the “land for a project to honour the late King Bhumibol.”

Then there’s the “Bangkok Observation Tower Foundation” which is now said to comprise 50 private companies and financial institutions who share a similar vision on how the land should be developed…”. No mention now of Charoen Pokphand or the royal-linked and owned Siam Piwat or of the royal-linked Magnolia Quality Development Corporation

But, as we know, they head the “Foundation.” They also develop the neighboring “Icon Siam, a mega-riverside shopping complex…”. An observation tower will obviously “enhance” traffic through their new mall.

Profits will roll in and part of them will be due to the taxpayer’s investment in a the “social project.” And the profits can be huge.

Military-dominated governments have long supported, with public funds, royal “projects” that are money-making. Think of the whole area around Princess Sirindhorn’s palace, the multiple malls there, with hotels and offices. It makes billions of baht a year. Icon Siam and its associated, taxpayer-funded tower will potentially make even more.

The taxpayer’s return on the tower will be about 2.3 million baht a year. What a deal! No wonder the military junta needs to protect this project.





The junta and that tower

29 06 2017

When we posted on the junta’s proposed erection of a giant tower on prime real estate, we could smell rotting fish. No bidding, no transparency, claims of “public good,” and then the declaration that it all had something to do with the deceased king suggested – no, shouted – that there was funny business.

The Nation reports that corruption alarm bells are ringing. And they should be.

Assistant junta spokesman Colonel Atisit Chaiyanuwat was the one who “disclosed that the Cabinet had exempted the project from bidding to speed up the project. ” Recall that yesterday the claim was lack of interest from construction firms.

The this same Atisit said “private investors would fund the tower project.” Really? Atisit also “backtracked from his earlier statement that the 459-metre-high tower would cost Bt7.6 billion, bringing that figure down to Bt4.6 billion.” Wow, a discount because no one wants to build it – they aren’t interested…. In other words, this is a mixture of buffalo manure and rotting fish.

Not deterred by contradiction and spin, Atisit also “said the project only needed Cabinet approval because it would be developed on a plot of land belonging to the Finance Ministry’s Treasury Department.” The idea being that the Treasury Department can do what it likes? And the poor taxpayer just gets stiffed again?

Located in Bangkok’s Klong San district, the plot is located on the Chao Phraya River, and is one of the most expensive parts of the city. Prices for land are well into the millions of baht per square meter.  The public purse, though, will reap a glorious 198 million baht in rent, over 30 years. That’s 6.6 million baht a year. Wow, what a deal! We wonder if the taxpayer is going to also get a few glass beads and other trinkets.

The Bangkok Post adds some important information about the deal that reveals quite a lot more.

For a start, it says income over 30 years for the Treasury will be only 70 million baht. And that’s from the director-general Patchara Anuntasilpa of the department.

Then there’s this tidbit:

Registered in 2014, the Bangkok Observation Tower Foundation was originally chaired by Visit Malaisirirat, CEO of Magnolia Quality Development Corporation Co, the property development arm of Charoen Pokphand (CP) Group. The position was later taken over by former Finance Minister Panas Simasathien.

The foundation’s directors include representatives from Siam Piwat Co, the operator of Siam Center and Siam Discovery.

Meanwhile, Magnolia, Siam Piwat and CP group are the joint developer of Iconsiam, a mixed-use project by the Chao Phraya River scheduled to launch by the end of this year. The project is next to the planned tower. In the promotional material of Iconsiam released in April, it wrote, “prepare for the 7th Wonder of ICONSIAM. An Iconic Landmark that will be a symbol of national pride,” without elaboration.

We all know who CP is. They are on top of Thailand’s non-royal rich list year after year, this year worth more than $21 billion. But what of Siam Piwat? For the answer, we will send readers to a 2013 post on royal wealth. Bingo!

Yes, it is yet another royal money maker. One source calculates that Princess Sirindhorn earns more than $50 million a year from Siam Piwat and the land in the area around her palace.

We guess that the next junta task will be to ban comment on its erection because that would be lese majeste and sedition, preventing slippery deals that make the royals wealthier still. And we still reckon that there must be some generals lurking behind the scenes gathering up the change that falls from the royal pockets.





Big business, wealth, royal connections and fines

21 03 2016

Big business supported the coup and the junta. It supported notions of anti-corruption, so long as it was elected politicians who were in the firing line. We wonder how it is doing now?

At ThailandBusinessNews it is reported that “top executives and shareholders of five companies listed on the Stock Exchange of Thailand for insider trading…”. The Securities and Exchange Commission (SEC) pursued insider trading for the second time in three months “on top managers who have abused their power in publicly traded firms for their own benefit or for their accomplices.”

Insider trading has long been normal in Thailand, as it has been in many Asian bourses and internationally as well.

In December, the SEC hit “four top executives of CP All Plc, Thailand’s biggest convenience store operator, with hefty financial penalties. For more details, see the story at AEC News Today. The company, one of Thailand’s whales and under the Chearavanont family’s Charoen Phokphand Group, ignored the fines and allowed the executives to continue in their positions. CP has long had connections with the palace but has also been wiling to bet on all sides of politics.

Now, the SEC has “fined top executives and shareholders of five companies listed on the Stock Exchange of Thailand…”. The report has details on Siam Makro:

It fined Korsak Chairasmisak, chairman of the executive committee, Piyawat Titasattavorakul and Pittaya Jearavisitkul, two vice-chairmen of the executive committee, and Athueck Asvanund, the firm’s chief legal officer, a total of 33.34 million baht for using inside information to buy shares in Siam Makro Plc.

At its website, the company has a 13-page “good corporate governance” document. Its board includes three scions of the Chearavanont family and the chairman of the board is none other than Asa Sarasin, and a board member of royal-dominated companies and other CP companies. Asa retired as secretary-general of the Office of His Majesty’s Principal Private Secretary in 2012, having held the position for 12 years.

Another hit in this bout of insider trading crackdowns is also a business whale:

On Wednesday, the regulator said it had banned Chai Sophonpanich, chairman of Bangkok Insurance Plc (BKI), from being a director at Bangkok Life Assurance (BLA) for three years for his involvement in insider trading. He has also been barred from working in capital markets for the same period. The ban took effect yesterday, but he is not prohibited from working at BKI.

The Criminal Fining Committee has imposed a fine of 500,000 baht on Chai Sophonpanich for disclosing inside information for other persons to purchase shares of Bangkok Insurance Public Company Limited (BKI).

Following a referral from the Stock Exchange of Thailand, the SEC’s further inspection has revealed that Chai, then chairman and chairman of the executive board of directors of BKI, proposed a dividend payment plan for BKI shareholders at the ratio of five existing shares to two dividend shares, on top of the normal dividend payment plan for the operating performance of 2013.

This was material information that would have supported an upward trend of the BKI share price. Chai disclosed such inside information to other persons who purchased BKI shares during 24-25 February 2014 before the information became publicly known on 28 February 2014. Such action was deemed taking an unfair advantage of other people.

The Sophonpanich family has been one of Thailand’s leading business families since the late 1940s. It operates a related family in Hong Kong, involved in banking, politics and other businesses.

Other executives found guilty of insider trading practices by the SEC were:

… Somyos Anantaprayoon, current chairman of WHA Corporation Plc, who was fined 500,000 baht for telling two newspapers — with the articles published on Oct 27, 2014 — that the company was in talks to acquire a listed company worth 50 billion baht, though such information had not yet been made public.

The Criminal Fining Committee has fined Somyos Anantaprayoon for dessiminating news that may have led other persons to understand that the share price of WHA Corporation Plc. (WHA) would rise or fall, and such information had not been disclosed to the Stock Exchange of Thailand (SET).

Following a referral from the SET and the SEC’s further inspection, it was found that Somyos, then Chairman, CEO and a major shareholder of WHA, had released news to the public through two media publications issued on 27 October 2014 with the key message that WHA was negotiating a business deal worth approximately 50 billion baht to take over a listed company that had long been established for more than 20 years in the same industry as WHA with a multiple P/E of 10.

His misconduct with regard to the dessimination of facts that had not yet been disclosed to the SET and contained material information that could have influenced investors’ decision making and the price movements of WHA shares being traded on the SET, was in violation of Section 239 and liable to the penalites under Section 296 of the Securities and Exchange Act of 1992. He was imposed a criminal fine of 500,000 baht

He’s one of the founding family of WHA. WHA has a 4-page code of conduct.

Another group hit is the family-controlled Siam Global House, with its boss Witoon Suriyawanakul listed by Forbes as entering Thailand’s richest list in 2013:

… Witoon Suriyawanakul, chairman of the management committee and director of Siam Global House (Global), and three other shareholders, who were given a combined fine of 25.3 million baht for insider trading.

The SEC found that Mr Witoon bought 8.02 million shares and 3.5 million units of warrants of Global from June 29 to Aug 23, 2012 using accounts of people who have a relationship with him in order to take advantage of inside information regarding SCG Distribution’s planned acquisition of Global. The other three shareholders were viewed as accomplices. The acquisition was disclosed to the public on Aug 27, 2012.

The Criminal Fining Committee has imposed a total fine of 25,322,064.39 on four offenders for using insider information to purchase ordinary shares and warrants of Siam Global House Public Company Limited (GLOBAL).

The four offenders are: (1) Witoon Suriyawanakul, (2) Kunnatee Suriyawanakul, (3) Apilas Suriyavanakul, and (4) Kriangkai Suriyawanakul.

All are from the founding family. The deal that was considered insider trading had a connection to the royal-controlled Siam Cement:

Following a referral from the Stock Exchange of Thailand, the SEC’s further investigation has revealed that Witoon and the three other persons in the same group purchased GLOBAL shares and GLOBAL-W warrants and gained benefits from such transactions. Witoon, who was chairman of the management committee of GLOBAL, had the decision making power over the terms and conditions of an agreement between GLOBAL and SCG Distribution Co., Ltd. (SCG), a wholely owned subsidiary of The Siam Cement Public Company Limited, with regard to SCG’s plan to hold at least 30 percent of GLOBAL’s total voting shares by purchasing GLOBAL ordinary capital shares through a private placement.

In this regard, SCG would make a partial offer of GLOBAL shares, which was expected to increase business strength for GLOBAL.

Making the most of being close to the royal center.

As the report makes clear, most of those found guilty “are from the country’s richest families.” The Forbes’ 2015 list of Thailand’s 50 richest has this:

– Mr Chai’s half brother, Chatri Sophonpanich, was ranked 14th with estimated assets of US$1.5 billion (about 52 billion baht)

– Mr Somyos and his then-wife Ms Jareeporn together were ranked 32nd with estimated assets of $765 million

– Witoon Suriyawanakul was ranked 48th and worth $470 million

The Chearavanont family was worth ranked 1st, worth US$14.4 billion.

It seems that the rich never have enough.

By the way, for interest, insider trading in other places seems to sometimes draw bigger penalties: In the US, 11 years in prison and fined a criminal and civil penalty of over $150 million; in the US, $8.8 million fine; and in Australia, more than 8 years in jail.





Law? Forget it

25 12 2015

red candleThere is plenty of commentary on the events of yesterday in the Koh Samui court where two Burmese migrant workers have been found guilty of murdering backpackers from Britain. Human rights groups have slammed the verdict, sentencing the two to death. Whatever else comes from this sad case, one conclusion that can be drawn is about the incompetence and lack of professionalism of the judicial process in Thailand, from beginning to end.

It is not just this case that points to failures. Many cases over the past decade or so speak to the double standards and corruption that riddles the police force and the judiciary. It is not being unreasonable to assert that the judicial process in Thailand works for the rich and the political elite.

For example, a Bangkok Post editorial refers to an “insider trading episode which involved CP All’s top executives…”. An op-ed at the Nikkei Asian Review, explains:

The insider trading incident occurred in 2013, according to a statement by the Securities and Exchange Commission (SEC) on Dec. 2. Korsak Chairasmisak, the vice chairman of CP All, was at that time its chief executive. He bought over 118,000 shares of Siam Makro, a cash-and-carry chain, over a 12-day period ending on April 22 that year. The following day, CP All announced a tender offer for Siam Makro shares at 15% above the April 22 close. The regulator found that Korsak had prior knowledge of the deal and imposed a fine of over 30 million baht ($833,000). Three executives involved were also fined 3.1 million baht in total, but no criminal charges were brought.

The four executives were fined almost $1 million but no criminal convictions were recorded. That’s bad enough, but with a few weeks of that, CP thumbed its nose at all of this, stating that “its audit committee and independent directors …[would] retain the positions of its four executives, including chairman Korsak Chairasmisak, tainted with insider trading convictions by the Securities and Exchange Commission…”.

CP, owned by the country’s richest, stated:

After reviewing the facts and taking into consideration the SEC punishment and the prior behaviour and performance of the individuals and their exceptional skills and experience, which would be difficult to replace, while balancing these factors with the overall effects and benefits to the company, as well as ensuring that this situation can never happen again, we have decided that it is appropriate for the individuals to continue in the business.

The Post editorial decries this and points at a weak law:

… weak law compounded by weak enforcement may explain why only a few cases of insider trading made it to the court, letting many offenders off the hook. According to SEC records, only three major cases were brought to courts while the other cases were settled by fines with the SEC, including the CP All insider trading case.

The Nikkei op-ed gets closer to the reality, with this headline: “Insider Trading: Thailand’s old normal.” Indeed it is. This is just one more example of the impunity enjoyed by the rich and its military allies. Laws don’t matter for the rich except when they are using them for their benefit or for exploiting the poor and vulnerable. This is royalist Thailand’s normal.





Military lese majeste

9 11 2015

After days of denial, it is reported at the Bangkok Post that “Col Khachachart Boondee, commander of the 1st Artillery Regiment, has been charged with lese majeste and abusing his authority for personal gain in two criminal cases…”.

Despite insistent claims of Army non-involvement, it was the military’s Internal Security Operations Command that lodged the charges, apparently on Saturday, exactly when the denials were being voiced. Strange that, the military is usually bellicose when dealing with lese majeste.

KhachachartThe report is that the charges against the colonel are the same charges “pressed against fortune-teller Suriyan ‘Mor Yong’ Sucharitpolwong and Mr Suriyan’s close aide, Jirawong Watthanathewasilp…”. The charges are described as related to “a past important event”, which the Post says are the “Bike for Mom” last August and “a forthcoming event”, the “Bike for Dad” on 11 December. Interestingly, the Army’s Rajabhakti Park project is not mentioned in Khachachart’s case (but see below).

The report has some details:

It was mentioned in the first complaint filed that the misconduct in the past event occurred at the 11th Infantry Regiment in Bang Khen district, and at the company CP All Plc in Bang Rak district of Bangkok between May and Aug 6.

The misconduct linked to the future event, meanwhile, occurred at King Power Co in Ratchathewi district of Bangkok on Sept 20, according to the second complaint filed Sunday by Maj Gen Wijan.

King Power has usually been associated with Newin Chidchob and is a big time sponsor – like CP – of royal events and royalism.

The colonel has reportedly fled to Myanmar.

Meanwhile, “a panel probing alleged irregularities in the construction of the army’s one-billion-baht Rajabhakti Park in Prachuap Khiri Khan’s Hua Hin district found that aside from irregularities surrounding the making of the king statues, the purchase of palm trees at 100,000 baht each was also unusual.” Implicated are numerous persons including an Army major general.

This is going to get bigger and bigger and the debris is going to further weaken the junta.