AOT’s support of King Power

The Airports Authority of Thailand was formed in 1979 and, controlled by senior Royal Thai Air Force officers, and is rumored to have provided an endless flow of money into their pockets and into the RTAF. The official history of the AOT reads like a royalist history and is odd in that it jumps from 1914 to 2006 (there’s more in the Annual Report). It became a publicly-traded company in 2002.

Often the subject of complaints about airport problems, it has hit the headlines in a big way in recent days when its opaque dealings became public.

The Nation reported that “[a]lmost Bt80 billion was wiped off the value of … AOT … today when its stock price dropped 8.7 per cent to Bt49.75 per share following the board’s move to assist King Power Duty Free (KPD) without first consulting shareholders.”

The report states that “AOT’s board of directors approved King Power’s minimum guaranteed payment method based on the number of passengers at Suvarnabhumi Airport, which remains lower than the estimate of the duty free giant.” It also “extended the duty free area renovation period from September 28 this year to March 31, 2022, because KPD and its Suvarnabhumi operation were unable to contact trade partners to prepare for reopening of duty free outlets.”

In other words, the AOT board agreed to subsidize King Power without consulting shareholders.

A stock analyst said AOT’s actions meant “his brokerage would change its investment recommendations…”. It was added: “We advise investors to sell AOT stocks…”.

The Thai Enquirer looked at the issue and suggested that “SET-listed, state enterprise Airports of Thailand drew shades of the 1997 economic crisis this week by asking Kasikorn Securities to withdraw an unfavourable analysis on AOT’s stock and calling in the author for clarification.”

Kasikorn Securities “had argued that the accommodating moves made by the AOT toward King Power would cost the company up to 130 billion baht.”

The report noted that “industry insiders” said that AOT’s behavior towards Kasikorn Securities was highly unusual.

Of course, all of this comes when “[b]oth the AOT and King Power have experience unprecedented losses in recent months due to the pandemic, with both companies heavily reliant on incoming tourists from abroad.”

What kind of public company is AOT? PPT looked at its website and Annual Report for 2019 for more information. In fact, while publicly-listed, AOT is essentially a state-owned company. While it has a registered capital of 14,285,700,000 Baht, the “Ministry of Finance is the major shareholder with a 70% stake…”. The next largest shareholders are institutional investors. The Board of Directors, despite having people listed as “independent director,” this is a nonsense as almost all currently work as Ministry officials or are recently retired or serving military officers or senior bureaucrats. The Chairman of the Board is Permanent Secretary of the Ministry of Finance. For those directors who attended all meetings, the Annual Report 2019 lists salaries and allowances of 825,000 to over 1.3 million baht. Each director received a bonus payment of 1.5 million baht. Then there are “Remunerations of Directors of Subsidiaries and Associated Companies,” which add a further 1-2 million baht to directors’ remuneration.

These are not huge corporate salaries, but nice little earners for bureaucrats. We can only wonder if there are other payments that might top up salaries even more.

So if the AOT is essentially a state enterprise, can we assume that the regime – government – approved of the subsidy to King Power?

 

Defining 2019

Several recent topics, actions and reports have defined 2019 under the junta, its military-backed “elected” government and the ever more powerful monarchy:

Law for the rich and powerful

Suchanee Cloitre (clipped from LePetitJournal.com)

Reporters Without Borders has condemned a “draconian two-year jail sentence that Thai journalist Suchanee Cloitre … received for allegedly defaming an agribusiness company [Thammakaset] in … Lop Buri in a tweet more than three years ago…”.

This is the maximum sentence given and its for an old tweet in an old case, where the journalist for Voice TV told the truth – the company was treating its workers as if they were slaves.

Her tweet was about a court “ordering Thammakaset to compensate 14 migrant workers who had been forced to work up to 20 hours a day on the company’s chicken farms while being paid less than the minimum wage and no overtime.”

When she referred to “slave labour,” the company sued.

In criminal defamation cases, truth is irrelevant. These cases flutter about like confetti as the rich and powerful use their law to silence critics. This includes the current regime. The media is so cowed by such cases that almost no one is prepared to tell the truth.

Going backwards

Khaosod reports on yet another effort directed by King Vajiralongkorn to erase all symbols of the 1932 revolution. This is the latest in a string of secret, then semi-secret and now brazenly open efforts by the palace to de-memorialize 1932 and replace it with symbols of the monarchy.

History is being re-constructed as we watch.

In this instance, memorials to two leaders of the 1932 revolution – Phraya Phahol Pholphayuhasena and Field Marshal Plaek Pibulsongkram – “are due to be removed from public view…” at a military base in Lopburi.

Apparently, the statues will be sent to a museum. We fear they will be destroyed.

It is no surprise that the statues will be replaced by “a new statue depicting the late King Bhumibol…”. No one will be permitted to contest the palace’s actions. A military spokesman stated that the two statues were “commoner statues [and] have to make way for the new [royal] statue…”.

In addition, the military base which “bears the name of Phahol Pholphayuhasena, will also be renamed to King Bhumibol Base per an instruction from the current monarch…”.

When will Thais stand up for their history?

Royal Household Bureau via Khaosod

An op-ed writer in Manila has bought the monarchist nonsense piled high in Thailand. He seems to believe that Thailand is “stabilized” by a “revered” monarchy.

Vajiralongkorn hopes this monarchism infects the citizens of Thailand to facilitate his reign, rule and grasping.

So far, he’s getting his way. And the king seems very intent on getting his way: land, money, laws, constitution, wives (who come and go) and much more. The more he gets the more he wants.

The missing … and “protecting” monarchy and regime

Vajiralongkorn and his henchmen in the military seem to have gotten his way on disappearing some of his opponents – probably meant as a “message” to anyone who dares speak against the monarchy. They should not be forgotten.

Clipped from Thai Alliance for Human Rights website

When they are not being murdered, political opponents are bashed .It is this regime of fear seems to have replaced the use of lese majeste.

Clipped from VOA News

We feel that this strategy has been devised by the palace in an effort to maintain both monarchy and military-backed government.

Regime gangsters

All of this “protection” serves monarchy and regime well (at least for the moment).

After manufacturing an election “victory,” the razor-thin majority that allowed the military junta to steal government, it has protected ministers and members who are needed to maintain the huge, unwieldy and Election Commission manufactured coalition.

Perhaps the best example of protection is deputy minister Thammanat Prompao, a convicted heroin smuggler. He also flaunts fake university degrees. But he’s not just a political fixer for the government’s Palang Pracharath Party who is being protected. He claims connections to the top.

When under arrest in Australia, he “told police he had worked as a bodyguard for the then crown prince of Thailand, had been an army spy…, and ran a side business while serving as an assistant to a top general.” That’s how it works in Vajiralongkorn’s Thailand.

Then there’s Palang Pracharath MP Pareena Kraikupt and her father. Her recent case of acquiring and using land that is supposed to be for poor farmers and/or national park seems unlikely to go anywhere as a cover up goes on.

The only thing keeping the issue in the cowed media is her father’s penchant for hit-and-run driving and mad media conferences, filled with lies. Once he’s quiet, watch Pareena squeeze out of her own problems. The regime prefers no criticism of it or its MPs.

Again, the rich and powerful can get away with murder (probably literally in Thammanat’s case), heroin smuggling, theft and other misdemeanors.

Make overs for the evil

Perhaps the weirdest of all news reports in late 2019 was when local “anti-corruption agencies awarded the Thai army for having the highest score on transparency and integrity among government agencies at an event held to commemorate the International Anti-corruption Day on Dec 9. It scored 97.96 points out of 100.” Weird, unbelievable and very silly. However, the point is the whitewashing. The powerful seem to relish whitewashing almost as much as it relishes ill-gotten gains.

Eating the state

Corruption is a bit old-hat these days as there are plenty of ways to feed at the breast of the private sector as it exploits the state and Thai taxpayers.

We couldn’t help noticing that on 15 December it was reported: “Airports of Thailand (AoT) is likely to scrap bidding to run duty-free pick-up counters at Don Mueang airport after only one company [King Power] expressed interest in the contest.” Of course, AoT didn’t. A few days later it was reported that the “board of Airports of Thailand Plc has awarded a 10.5-year duty-free concession at Don Mueang airport to King Power Duty Free Co, which offered a yearly 1.5-billion-baht minimum return…”. King Power, the current monopoly duty free store at all airports now has new 10-year contracts for all those airports.

There must be many in various military and state offices – right to the top – who will benefit from these new contracts.

Somehow we doubt that 2020 will be better than 2019.

Guess who?

About a week ago we posted “Duty free awarded as it was always going to be awarded.” Then, King Power “won” the “bidding” to run the duty free stores and all the commercial space at Suvarnabhumi airport.

This seems a bit like The Dictator and self-appointed prime minister “winning” the “vote” in a rigged parliament to become prime minister again.

Now, also as expected, “King Power Duty Free Co has won a bid to run duty-free shops at Phuket, Chiang Mai and Hat Yai airports…”.

That means King Power has all the duty free contracts offered at airports by the Airports of Thailand Plc. Yes, every single one of them. That also means the lucrative King Power duty free monopoly continues.

As it announced for Suvarnabhumi, AoT said “the winning bidder for the operation of the three regional airports was King Power as it offered highest returns than its two rivals and also received the highest scores.”

As in the previous “bid,” those who lost were consortia “led by Bangkok Airways Plc and a venture led by Royal Orchid Hotel (Thailand) Plc…”.

The next duty-free “bid” comes up later in the year, for Don Muang airport. Any bets on who might win that “bid”?

King Power is well-connected, having important political and royal alliances.

Duty free awarded as it was always going to be awarded

It was some time ago that there were mutterings that football oligarchs at King Power might lose their lucrative monopoly on duty free. Other retailers complained and mumbled about competing with King Power for the monopoly post-2020, when King Power’s contract ended. Others claimed that money owing to the state was going missing but the courts disagreed.

The junta even went back and forth a bit on the new concession and there were stories about auctions and big foreign bidders.

Now we haven’t followed this story particularly closely, but we did notice the story that Airports of Thailand Plc that the “King Power Group has won the bid to operate duty-free shops at Suvarnabhumi airport for another 10 years and six months and another to run commercial space at the airport…”. That seems to us like no change at all, despite the grinding of teeth that seems to have gone on.

AoT executive vice-president Wichai Bunyu said there were just three contenders, and that King Power blitzed the others “in terms of financial returns.” He said” “The promised return is higher than what we’ve received and exceeds our expectations…”.

The other contenders were a group led by Bangkok Airways and the Royal Orchid Hotel (Thailand) company.

Having held the monopoly at Suvarnabhumi since the airport opened in 2006, it will be 2031 when this concession finishes. Not bad when it is considered that tourist numbers have ballooned from 11.5 million in 2006 and are forecast to reach almost 80 million by 2030.

The very same day this concession was awarded, “King Power Suvarnabhumi Co, another subsidiary of the group, won the bid to develop and operate commercial areas at the international gateway, also for 10 years and six months” over Central Pattana Plc. AoT’s Wichai gave exactly the same reasons for this concession being awarded to King Power. He added that the “overall commercial space covered 22,000 sq m…”.

Other concessions are coming up for duty-free outlets at Phuket, Hat Yai and Chiang Mai airports, and King Power wants those too.

King Power’s Srivaddhanaprabha has grown hugely wealthy on duty free. It has also been able to back some political wheelers and dealers, most notably Newin Chidchob of the Bhum Jai Thai Party and has been skilled at making royal contacts. That all helps the group and family get wealthier.

Obscene inequality

Agence France-Presse has an interesting report on the fabulously wealthy in Thailand. It begins by noting that Thailand “has 50 billionaires – ninth in global rankings – [while] 14.5 million people live on welfare…”.

It adds that wealth – or inequality – was “a hot election issue this year…”. In fact, PPT can’t think of an election this century where the inequality of wealth has not been an issue. Thailand has long been at the top of Southeast Asia’s inequality rankings, going back to when estimates were first made in the early 1960s.

The hook for the AFP story is the absurdity of the ridiculously rich playing and watching polo that witnesses “teams of jodhpur-clad Argentines and moneyed Asians gallop onto the flawless field in Chonburi as spectators spill from a pavilion – glasses of champagne in hand – for the final chukka.”

The so-called sport of kings is obscenely expensive limited to royals and the obscenely rich. We have mentioned it in a couple of posts. As well as the King Power Srivaddhanaprabha family others in jodhpurs include naturalized billionaire Harald Link. Polo allows Thailand’s hugely wealthy to hobnob globally with royals and the obscenely rich. That includes the British royals, Brian Xu, of Shanghai Marco Stationery and Sultan Abdullah Sultan Ahmad Shah now the Malaysian king.

The article notes that Thailand is home to polo because “royalty, wealth and elite networks are cross-hatched into the social fabric.”

Interestingly, the article cites Kobsak Pootrakool of the junta’s  Phalang Pracharath Party, lamenting the huge inequality in the country. He states that “[t]he top 20 per cent own 80 per cent of wealth…”. He should know as most of the very wealthy support his side of politics.

It’s actually even more skewed that that. The Credit Suisse Global Wealth Report had 1% of the richest Thais controlling 66.9% of the country’s wealth in 2018. And that probably doesn’t include a calculation for the obscenely rich monarch.

In contrast, as the report observes, “[m]ore than 14.5 million Thais qualify for welfare, with most of them earning less than US$1,000 a year.”

The report also notes that a feature of Thailand’s politics is the military coup, usually “with the support of much of the Bangkok-based elite, who underpin the kingdom’s sharp hierarchy and bristle at economic and political challenges from below.”

It is wryly observed that “[c]ash … cascades down family-run businesses, whose monopolies are inoculated against competition by friends and family in politics and generous tax breaks, while generals sit on company boards.”

The military’s task is to ensure the poor do not rise. When they have, it has jailed, beaten and murdered them.

Future Forward’s Thanathorn Juangroongruangkit, himself a scion of huge wealth, declares: “Inequality won’t be solved … unless that clot of power and money is removed,” warning that inequality is “a threat to stability in the country.”

We doubt that many in the polo set and their hi-so brethren care much at all, recognizing that their wealth depends on the state’s largess and the capacity to exploit workers at will and destroy the environment.

That allows the obscenely wealthy to party obscenely, collect palatial condominiums and super cars by the score, travel the world and buy a “justice” denied the poor.

Helping friends and supporters

The military junta has managed to stare down efforts to investigate its corruption. It has been able to do this by intimidation and because it has made puppets of all the state and “independent” agencies that are meant to investigate corruption. And, of course, the friends, supporters and companies that benefit are happy to pocket the gains.

So it is quite something to see that a private sector peak body has “slammed the government for giving Airports of Thailand Plc (AoT) latitude in handling the controversial duty-free shop bidding, demanding accountability for a process that would damage the country.”

For a decade, duty free has been a monopoly, commanded by the King Power group (search out tag for additional posts), massively enriching the late Vichai Srivaddhanaprabha and his family and provided additional sustenance for associated political, military and royal “partners.”

This huge value of duty free stores is why there is now great competition to get hands on the goose and its golden eggs. And, it is why there’s some voice being heard about the shenanigans over the bidding (both open and behind closed doors).

It is why Worawoot Ounjai, president of the Thai Retailers Association, has slammed “the latest ruling on the bidding process for the duty-free shop concession [that] will allow the AoT to arrange the bidding by itself.” Worawoot states: “As this [junta’s] administration comes to an end, we’ve witnessed much news about its decisions that benefit several business groups,…”.

He mentions a range of recent junta decisions and wheeling and dealing, “from high-speed trains and telecom to duty-free shop concessions,” and he pointedly says that “Thais have to ask this government if it will be responsible for future actions that bring damage to the country…”.

When business groups start demanding “accuracy and transparency,” you know that shady deals are being done. Worwoot declares:

We’ve seen poor results from this type of bidding before and called on the government for accuracy and transparency. But the answer comes as expected. We have to get over it because this is the state of our country.

If the election tinkering goes as expected and Gen Prayuth Chan-ocha and the junta’s Palang Pracharath Party control government, bet on this situation worsening.

King Power and the king

This is a post about kings of commerce and kings of country. The two may or may not be related.

Vichai Srivaddhanaprabha, the king of duty free, is barely gone and his empire may be unraveling. A Reuters report explains that the giant Central Group – one of the top 5 capitalist groups in Thailand – and DFS Venture Singapore have “snapped up retail and services concession at an upcoming airport in the eastern province of Rayong … beating out duty-free giant King Power.”

That concession allocation was controlled by the military.

As the report explains:

U-Tapao is the first airport in Thailand to hold an auction with multiple concessions, splitting up duty free and retail operations. Up until now, King Power has enjoyed near monopoly, being a sole operator with concessions in all major airports.

King Power’s monopoly concession ends in 2020.

Meanwhile, the king of the country is preparing for his next propaganda/image-building outing. The palace propaganda machine has now decided that the event can be for hundreds of thousands. Earlier reports were that the junta was recruiting 50,000 for the event, but now that figure is doubled for Bangkok alone.

As part of the incentive to drive participation, the palace has come up with “a uniform for Un Ai Rak cycling event participants” featuring the childish scrawling of the king. This will be given away. That’s a large and expensive exercise. It remains unclear who is coughing up for the free shirts.

The king’s also decided to “rehearse” the ride, promising even more traffic chaos and expense for the taxpayer.

The other Vichai story

With all the eulogies for Vichai Srivaddhanaprabha being wholly laudatory, BBC Sport Editor Dan Roan is in a spot of bother after being caught “talking about Vichai[‘s]… personal assistant Nusara Suknamai.” He said: “As opposed to the mistress who died in the crash, otherwise known as member of staff, i.e. mistress… family man…”.

Nusara has been described as a “[f]ormer beauty queen who was runner-up in Thailand’s Miss Universe.”

Fans of Leicester City attacked Roan, variously describing him as despicable and an enemy of the club. He was told by some that he was no longer welcome at the club. These fans lauded Vichai and hated the fact that the BBC editor had, well, told the truth.

The claims by others were uncritical and blur truth. It was Britain’s Prince William who stated:

My thoughts today are with the family and friends of Vichai Srivaddhanaprabha and all the victims of the terrible crash at Leicester City Football Club…. I was lucky to have known Vichai for several years. He was a businessman of strong values who was dedicated to his family and who supported a number of important charitable causes.

Vichai is next to the tall lad in red

There’s no evidence that Prince William’s claims are anything other than a repetition of the spin that has been associated with Vichai and King Power in recent years. The BBC mistress slip is just one aspect of this.

Lauding Vichai as something of a hero in the context of Leicester and Leicester City is understandable. Spin from a royal polo partner are also no surprise.

But the failure of the media to investigate more is disappointing.

After all, Vichai’s business history is of virtually inexplicable, very sudden and huge wealth. Yes, King Power is known, but the company and its founder are secretive. What is known suggests he may have grifted his way to great wealth, not least by polishing the right posteriors. Once he had great wealth, he selectively polished his own posterior by carefully managing his and the company’s limited media profile.

On the mistress claim, it is not at all odd to learn that a Sino-Thai mogul would hire an “assistant” who is a former beauty queen. That she might be a mistress is also pretty much “normal” in Thailand. Most Sino-Thai tycoons have a stable of mistresses.

And, of course, not just tycoons and not just Thailand.

But in Thailand, there’s a normalization of such relations. Politicians and military types are good examples. Gen Sarit Thanarat had a bevy of mistresses. Whispers about other leaders are only sometimes revealed, usually in squabbles over their ill-gotten gains. Examples included Gen Sunthorn Kongsompong, Chatichai Choonhavan and Chavalit Yongchaiyudh.

And, of course, there’s the massive official silence in Thailand about the current king’s “troubled relationships with a succession of wives and mistresses.”

It is about power. For the tycoons, wealth means power and having a mistress is “normalized.” But that link between wealth, power and mistress should not be ignored.

Vichai’s political location

The Nation was quickly off the blocks with a eulogy for Vichai Raksriaksorn-cum-Srivaddhanaprabha. It lauds him as a “master of the big deal.” What, exactly, does this mean?

The articles observes that Vichai was “the key figure behind the huge success of King Power International, Thailand’s duty-free shopping giant,” adding that he “bagged many big deals … including their latest acquisition – the MahaNakorn development project, Thailand’s tallest mixed-use tower – at Bt14 billion.”

The Nation says that Vichai was “a son of Wiwat and Prapasorn Raksriaksorn. He graduated high school from Woodlawn High School, US, and did his bachelor’s from the Faculty of Liberal Arts, Ramkamhaeng University, and got a degree from Northrop University’s Business Administration Faculty in the US.”

There’s a couple of Woodlawn schools in the US. However, Northrop University is known for having been de-registered in early 1992 for an array of corrupt activities, poor administration and low standards.

The report claims “Vichai became a vastly experienced businessman, both from his own and jointly-managed companies,” but the companies pale into minuscule insignificance when compared with King Power, which was founded in 1989. He had some experience with Downtown DFS (Thailand), but King Power eclipsed and pushed aside Downtown/DFS and all other competitors for concessions at the airports.

Vichai’s move into duty free began with “the country’s first downtown duty-free shop as a joint venture with the Tourism Authority of Thailand, before expanding the business to Cambodia, Macau and China, as well as Thailand’s international airports.” The company’s own history is brief but worth a look while wondering how it all happened. It states that it received the airport monopoly concessions in 2006, whereas an AP report states: “The granting of King Power’s monopoly status at Thailand’s airports — set in motion in 2004 by the government of since-ousted Prime Minister Thaksin Shinawatra — caused some controversy.” PPT looked through standard references and at our newspaper clippings, but could not confirm the AP account. (Readers can let us know.)

Exactly how King Power achieved its monopoly remains opaque for us. What we do know is that duty free shopping creates all kinds of advantages, one of which is huge cash flow, which has grown by leaps and bounds as tourism has expanded to enormous growth. The report states that “Vichai controls and chairs $3.3 billion (revenues)” from King Power in a private company with a board studded with children and other relatives.

The report notes Vichai’s close link with Newin Chidchob and also mentions a close connection to the Deputy Dictator Gen Prawit Wongsuwan. It doesn’t mention his links with Bhum Jai Thai Party leader Anutin Charnvirakul.

His “passion for sport, especially polo and football” is also listed.

Exactly how Vichai came to be “ranked by Forbes as the fifth richest person in Thailand in 2018 with US$4.9 billion” remains something of a mystery. His wealth is huge but he also pays 2 billion baht a year for the Suvarnabhumi airport concession.

But then there’s the fact that in 2012 “the family was bestowed the new family surname Srivaddhanaprabha by … the late King Bhumibol – the name means ‘light of progressive glory’.”

Like many Sino-Thai tycoons, Vichai was an extraordinary royalist and supported many royal causes. He has credits for the yellow wristband for the king.

Political backstopping, royalism, and opaque deals and bureaucratic linking seem to be a pattern for fabulous wealth for a well-connected few.

Updated: King Power helicopter down II

Most international reports are now assuming that Vichai Srivaddhanaprabha is dead following the crash of his helicopter in the U.K.

What is somewhat odd about these reports is that they are based on little official information and continuing silence on important matters from the football club, Vichai’s family and King Power. Even police are silent as they say they are investigating. There’s no confirmation of who was on the helicopter, whether some were taken to hospital or if bodies were recovered.

Fans of Leicester City appear convinced that Vichai was on the helicopter and that he died in the crash.

In Thailand, it seems that Vichai’s business and political allies know what has happened. The Straits Times reports that the media :

… zeroed in on another football baron, Mr Newin Chidchob, who owns local league champion Buriram United football club and was at Pullman Bangkok King Power hotel next door. The motorcycle enthusiast looked grim as he left the hotel with his entourage of superbikes.

Meanwhile, Bhum Jai Thai Party leader Anutin Charnvirakul, “who said he had just spoken to Mr Newin” stated: “We just lost someone who made big contributions to the public. I am sure his legacy will live on.”

Anutin added that Vichai was a “big brother,” stating: “He is a self-made man, worked hard and loved friends dearly…”. Reflecting the norms of Sino-Thai tycoons, Anutin recalled: “I told him that I loved riding horses and, the next day, a nice horse was sent to me… That’s the way he was.” He does not explain what “self-made” means in the murky world of King Power’s monopoly.

Update: Leicester City has now confirmed Vichai’s death. The club’s statement includes confirmation that “None of the five people on-board survived…”. The report states that “Leicestershire police have named them [the others on the helicopter] as Nursara Suknamai and Kaveporn Punpare, two members of Vichai’s staff, and pilot Eric Swaffer and passenger Izabela Roza Lechowicz.”