Updated: Big deals for the Crown Property Bureau

7 10 2017

In a somewhat bland Bangkok Post article it is reported that the “Crown Property Bureau’s shareholding in Siam Commercial Bank (SCB), Thailand’s third-largest bank by assets, has declined by 3.33%…”.

That amounts to about 17 billion baht or more than half a billion dollars.

The CPB remains the bank’s largest shareholder after the transaction on 2 October. There were few other details.

SCB shares fell every day following the transaction in a market that reached a 24 year high.

The Post provided no other detail or any analysis suggesting fear at work.

Sure enough, a Reuters report suggests murky trading. It states that the shares “have been transferred on behalf of King Maha Vajiralongkorn from the Crown Property Bureau…”.

The report adds that the Securities Commission “filing by the Crown Property Bureau did not identify the ultimate beneficiary of the shares, nor did it indicate if any money had been paid for the shares.”

This is an odd “transaction.” It may have been a sale, but we don’t know. (PPT could not locate the announcement at the SCB website or those of the Securities and Exchange Commission or the Securities Exchange of Thailand.)

Reuters states that the CPB confirmed the transaction but declined comment further. An official reportedly said: “It is his majesty’s private affair so I cannot comment further…”.

The SCB also “declined to comment on the transaction in its shares.”

That’s odd for a publicly listed firm and will probably worry some institutional investors. If we were SCB shareholders we’d be very concerned about this lack of transparency. After all, SCB is supposed to be a public company, not a royal plaything.

This isn’t the only recent deal that lacks transparency. Back in late 1994, there was a deal done to buy most of Kempinski, the hotels company. The annual report for that year stated:

It was the SCB that headed up this takeover, with its chairman becoming the chair of Kempinski. When the economic crisis hit, Dusit Thani “sold its share of Kempinski Hotels to its partner, the Siam Commercial Bank…”. Exactly how this was done is unclear as the SCB was struggling at this time.

In a remarkably opaque statement at the Kempinski website, it is stated:

In 2004, the Thailand Crown Property Bureau took over a majority holding in Kempinski AG, which enabled the company to extend its portfolio even further by means of a global expansion strategy and to develop new markets.

How the CPB obtained Kempinski from SCB is unclear. The same site then adds, equally opaquely:

After 13 years, in February 2017, the two existing shareholders formalised previous plans for an equity transfer between them and the majority shares are now held by the existing Bahraini-shareholder while the shareholder from Thailand now owns a minority.

Some say the “equity transfer” was worth one billion Euros. That means about $1.6 billion in two known but opaque deals in 2017. These coincide with the king’s formal expansion of his power over royal loot.

Update: The Nikkei Asian Review states that it is King Vajiralongkorn who “has personally become a major shareholder in Siam Commercial Bank (SCB) following the transfer this week of shares held by the Crown Property Bureau (CPB) valued at about $500 million.” It adds: “report filed with the SEC by the Crown Property Bureau, it was stated that the 3.33% holding had been transferred to King Vajiralongkorn, but there was no indication as to whether there was any payment for the stake.”

The motivation for such a transfer remain unclear.





Insider deals

26 09 2015

One of the benefits of being the largest business conglomerate in the country is that the special deals can always be done.

The largest conglomerate is the murky Crown Property Bureau. With relatively little information available (the latest effort is again by Porphant Ouyyanont, reviewed here), there are occasional reports that provide small insights into the elite-level machinations around CPB activities.

In recent days, the seemingly confusing reports on the grand failure of Sahaviriya Steel Industries in the U.K. investment taken not that long ago, have included some information about the CPB. SSI’s Board of Directors includes, apart from those of the Viriyaprapaikit family, includes a clutch of old men from state enterprises and some with strong links to the CPB.CrownProperty

SSI’s problems in the U.K. have had repercussions for several Thai banks and investors. A major impact has been for gems of the CPB, the Siam Commercial Bank and the Siam Cement Group.

Reuters reports that the Siam Commercial Bank has been forced to sell its stake in Siam Cement Group to raise “4.46 billion baht ($122.76 million) to help to cover provisions for loans to struggling steel firm.”

SCB is “one of three main creditors that lent SSI money to buy Britain’s second-largest steelmaker in early 2011. But a sharp drop in international steel prices forced SSI to halt production last week at its British plant in Redcar in northeast England.” The other two are Krung Thai Bank and Tisco Bank. The report is that the three banks are “working on restructuring around 50 billion baht ($1.4 billion) of SSI’s debt.”

The SCB has been forced to dispose of “some of its foreign investments to meet a target of raising 7-8 billion baht ($192.78 million-$220.32 million) toward SSI loan provisions of 10-11 billion baht.”

In addition, its Siam Cement sale “is included in the 7-8 billion baht target. The shortfall will come from SCB’s earnings.”

No prizes for guessing how the CPB has handled this crisis: “The Siam Cement shares were sold to the Crown Property Bureau which is already a major shareholder in Thailand’s biggest cement firm…. The Bureau also owns a 21.3 percent stake in Siam Commercial Bank.”

This set of inside deals is passed off as somehow normal: “We sold all our holding in Siam Cement to the Crown Property Bureau…. The Crown Property Bureau wanted to raise its stakes in Siam Cement. So, the shares changed hands in the same investor group.”

None of us at PPT are investors or economists so we can only wonder about these trades within groups and their lack of transparency. We can guess that the CPB is shaking a bit from the dealing that has been imposed on it.

 





Royalist calls for capitalists to be overthrown

7 04 2012

Royalist Amorn Chantarasomboon, a former secretary-general of the Council of State, seems the wrong person to be calling for capitalists to be ousted. And yet he has been consistent in blaming capitalism for Thailand’s ills, including its political crisis.

Of course, while his call may sound radical, it is actually based on a deep conservatism. What they want is not some form of socialism but a monarchy presiding over commoners working away in sufficiency economy villages where people are kept well away from political decision-making.

Back in 2009, Amorn joined with a gaggle of royalists and People’s Alliance for Democracy-aligned sham academics to call for “comprehensive political reform. This was a “call for [the] removal of root causes of problem haunting the country” and to reassert that Thaksin Shinawatra is “funding unrest.” At that gathering of royalists, Amorn declared the political system “a dictatorship by capitalists…”.

Amorn, like many royalists, stated that “political reform should be undertaken by politicians, because they had a conflict of interest…”.

Nothing much has changed for Amorn, and at the Bangkok Post he now declares that the “courts of justice are facing mounting pressure from political parties that wield dominance over parliament…”. He referred to a “parliamentary dictatorship” of “parties which in turn are controlled by financiers.”

Here Amorn is being careful to denote a particular type of capitalists, but if “financiers” is the term used, we wonder if there are flutters of concern at the major financial institutions such as the Bangkok Bank and the Crown Property Bureau-controlled Siam Commercial Bank?

We doubt it, as these are royalist banks are unlikely to be included in Amorn’s attack on renewed attack on Thaksin. But it is interesting that the attack on capitalists – and Amorn is only one of the yellow extremists making this call – ignores the largest capitalist conglomerate in the country that is the CPB. That’s because Amorn has long called for royal powers to be increased. But then Amorn’s convoluted logic also includes a call for “the judiciary to … ensure their verdicts can benefit people and protect the private sector.”

Amorn had a role in the drafting of the 1997 constitution, and PPT has to wonder why Amorn is so unhappy with the 2007 constitution, which the military junta ensured that the judiciary had more power and an vastly expanded political role. Did their “fixing” of the constitution not go far enough or did they screw up?

As far as we can tell, the answer for Amorn is that any constitution that allows an electorate to choose their politicians is a problem. Amorn has been unable to believe that an electorate can consistently elect pro-Thaksin parties if they are not stupid, duped or paid.

The thing that motivates the diehard royalists is a political position that is based on a desire for rule by a few. They can’t abide any notion that the ruled should count, for they believe there are great and good ones who know best how a country should be administered. Amorn would have felt at home in the nineteenth century, and his pocket watch seems broken at about midnight on 23 July 1932.





Royalist hypocrisy

2 04 2012

This story at the Bangkok Post appeared a few days ago and we are late getting to it. However, it does tell us a good deal about the thinking of some of the elite think about the issues of the day and manage a schizophrenic logic.

Kasem Wattanachai is a former minister in the first Thaksin Shinawatra cabinet, but fell out and was quickly sucked up into the Privy Council and was publicly critical of Thaksin.

The first thing to note is that Kasem appears to accept a report by a law lecturer at the National Institute of Development Administration and sponsored by the Ombudsman’s Office, that claims foreigners “own vast amounts of land in Thailand via local nominees.” In fact, the report claimed that “up to one third of land in Thailand is owned by foreigners.”

This claim is complete nonsense and this doesn’t require much brain power to work out. The idea that “foreigners” now “own” about 170,000 km2 of the country boggles the mind. Even if this area was restricted to arable land and land in urban areas, the claim remains unbelievable.

So we have a privy councilor who chooses to believe an unbelievable and outlandish claim.

He then proceeds to lectures “people” should “not let ‘greed’ draw them into cooperating with these foreigners because farmland should be reserved for Thai farmers as their place of work and for their livelihood.”

And while the claim is of “foreigners,” Kasem chooses to single out “rice fields are being sold and rented to investors from the Middle East.” He warned Thais “against helping foreigners acquire land” and urges these farmers to defend their land. As might be expected, he tells them to follow the king’s advice and keep farming and “love” their land.

Ignoring the inherent racism and the royalist banter, it strikes us that the statements are hypocritical.

First, a representative of the richest conglomerate in the country, with extensive foreign joint ventures and large international investments, is telling poor farmers what’s best for them.

Second, as far as we can tell, the Crown Property Bureau’s international investments include landholdings. For example, the Kempinski Hotels group, majority owned by the CPB, with “an international portfolio of 62 hotels” and a “further 43 hotels … under final development or construction in Europe, the Middle East, Africa, Asia” would wonder about being prevented from buying or renting property.

Third, in its early years, in the nineteenth and early twentieth centuries, the CPB played a critical role in facilitating the investments of Chinese business people, many of who were recent migrants to the country, and rented and sold plenty of land to them. Post-1957, the CPB also played a direct and pivotal role  in joint ventures with foreign investors. So too did its Siam Commercial Bank (and all the other commercial banks). In addition, the monarchy itself went out and “sold” Thailand to foreign investors.

Were they being greedy too? Is nationalism only for the poor?: if they have no rice, let them eat nationalism and sufficiency “economics”!

As a footnote, it is noted that the CPB  is probably the largest land owner in the country, and owns vast tracts of rural land, and we know little about how the CPB uses that land. A Forbes report the CPB has “vast land holdings that Forbes used as the basis of its estimate: “In central Bangkok, the king owns 3,320 acres; town and country holdings stretch to 13,200″ acres.





Royal-invested companies and Burma

15 11 2010

The Bangkok Post has a most useful story on why the Abhisit Vejjajiva regime, and especially its royalist-capitalist wing, has so wholeheartedly jumped into bed with the Burmese regime. It says: “Thai heavy industry is likely to shift to industrial estates in Burma’s western coastal city of Dawei instead of setting up facilities in southern Thailand or Map Ta Phut…”. Map Ta Phut has been a problem for them – including several royally-invested firms.

Just who is likely to invest?  The story says: “Companies planning to invest in a Dawei industrial estate include PTT Plc, Siam Cement Group and the upstream complex of a Japanese steel company.” Both groups have had considerable trouble at Map Ta Phut, so what better way to solve a problem of environment and  “civil society” than to go and invest in Burma, where the military can guard them from all business and political threats, or so they think.

According to the NESDB, “It is quite clear, he said, that more heavy industry cannot be located in Map Ta Phut in Rayong, while the agency’s survey showed residents in the South disagreed with the establishment of an oil refinery and petrochemical complex.”

PPT wonders when they will add the gimmicky ideas about how this is sufficiency economy and good for Thailand… even nationalist? Oops, the latter has already begun: “It is predicted Dawei’s wide-ranging infrastructure project will strengthen Thai competitiveness with improved access to raw materials such as natural gas and ore for the steel industry from the Middle East and South Africa.”

And guess which obedient leader has helped out, yet again? “Prime Minister Abhisit Vejjajiva also sought the support of the Chinese government for the Dawei project on the sidelines of the G20 meetings last Friday, encouraging Chinese companies to set up projects in an industrial estate planned by Thailand’s Amata Corp.”

All so predictable.





What a royalist says about politics

24 03 2010

It is always useful when royalists go into print and share their views on politics and the monarchy. Asia Times Online (24 March 2010) has just posted a long story and interview with never-elected prime minister and ardent royalist Anand Panyarachun. The article refers to Anand as a “palace insider [who] epitomizes the ammataya, or aristocratic elite, that Thailand’s red shirt-wearing United Front for Democracy Against Dictatorship (UDD) protest group claims to be up against in a ‘class war’ for democracy.”

As the article notes, the UDD sees Abhisit Vejjajiva and his government as being “propped up by conservative interests and criticized top royalists, including Privy Council members selected by King Bhumibol Adulyadej, as impediments to democracy.” Anand has long been a spruiker for the monarchy, especially to foreigners, and regularly recycles his Thai monarchy speech. He’s sometimes seen as a royalist who is also “liberal” in terms of politics and is an insider, being at the top of the board at the royal bank, the Siam Commercial Bank.

In this post, PPT simply provides a commentary on Anand’s comments to the ATO.

Anand might well be seen to be again displaying his alleged political liberalism when the ATO says that he believes “holding new elections would help to resolve the country’s escalating political crisis, but not be a cure-all.” He adds: “Elections cannot resolve everything, but they may be helpful in accelerating the resolution of the problem.”

PPT prefers to view Anand as a political conservative, and this article displays his political position quite well. In addition, it provides some useful insights into how the people at the top and around the palace think.

Take the election comment as a starting point. In an earlier speech, Anand had expressed dismay about “Western” complaints about the overthrow of Thaksin Shinawatra by the coup in 2006: “I never thought that some Westerners would equate elections with democracy.” And in this interview, when he speaks of elections, he’s not giving any ground to his opponents, predicting an election “next year.” Well, yes, that’s what’s supposed to happen as the government’s term expires at the end of next year. Only the UDD could derail this. Anand is firmly committed to the current order.

Like all good royalists, Anand believes that democracy is not really what Thailand is about. “Thailand will continue to muddle through with its particular brand of democracy, which he describes loosely as an ‘ad-hocracy’ where politicians improvise and ‘roll with the punches’.” Thailand is different from the West, because “In Asian culture, particularly in Thailand, everything is personal. And that’s not good for democracy.” While Lee Kuan Yew might have pointed out that Asian-style democracy was not real democracy because of Confucian group orientation, Anand is essentially on the same conservative line – Asians are different.

What does Anand think of the UDD? He says “They must be bankrupt of ideas. And there’s no leadership. These three or four guys … use rhetoric all the time. They have no credibility. Some of the more credible figures in Thaksin’s camp never came out. [Former prime minister and Thaksin ally] Chavalit [Yongchaiyudh] disappeared. [Former Internal Security Operations Command deputy director] General Panlop [Pinmanee] is where? Nobody came out. I think in Chavalit’s mind he knew it was a lost cause, these demonstrations. And they must have spent a fortune.”

This is the view of a royalist insider. PPT wants to unpack it. The UDD is “bankrupt of ideas.” That’s a bit rich from the royalist camp that has been peddling the same monarchist ideas for decades. Aside from that, those who are “bankrupt of ideas” have succeeded in changing the political debate in Thailand. While much of the current media discussion of “class war” is a mulch of ideas from the Cold War and from the uninformed – here we mean from opponents of the red shirts – there’s no doubt that the political discourse is now of phrai, amat, double standards and inequality. Opponents and supporters alike have adopted this lexicon.

Even Anand is required to engage. He says: “When they try to incite demonstrations into a movement of class warfare, that will not work in Thailand. The communists tried 25 years ago. It will not work because there’s no such thing.” Not only does Anand forget how extensive the communist movement was in Thailand, but he uses the “communist” label to damn the current red shirt movement and scare the Bangkok middle class and elite.

None of the opponents of the red shirts consider that the rich and powerful in Thailand have been waging their own class war for decades. Worker and peasant movements have been repeatedly smashed and disorganized. Those from the lower classes who stick their heads up and refuse to be co-opted find life difficult, if they are permitted to keep breathing. Opponents of the monarchy are regularly threatened, charged and jailed with laws that provide and protect privilege.

On Chavalit, Anand is wrong, although not entirely so. At the beginning, Chavalit seemed reluctant to get involved and was in hospital. Now, however, he has provided his support and appeared on the red shirt rally stage with the leaders of the movement. With respect to Panlop, this is an odd comment. Anand says that Panlop is a “credible figure and yet the red shirt leadership wanted him sidelined because of his penchant for violent actions. The royalists and the government seem to want the red shirts to be constructed to fit their own propaganda and beliefs about the movement.

For Anand, as for Abhisit, all this trouble is Thaksin-related. Thaksin is surrounded by acolytes “of many kinds. Real converts. Some people genuinely fawn and worship Thaksin, but there are so many converts who do it for their own personal agenda, their own interests, their own financial interests. So he’s been hearing only one side of the story and I’m sure he was misled by these leaders who say they can embark on a very, very important, a very, very decisive sort of battle.” Thaksin has been misled by those who seek wealth. The refrain of being misled and paid usually refers to rural voters, so this is a neat twist. That said, isn’t the palace surrounded by acolytes of exactly the kind Anand says make up red shirts? Anand could fall into this category, and he hasn’t done all that badly by his own fawning.

At least the red shirts, with “all these antics and stunts” haven’t engaged in “violent actions.” Anand is thankful for that. And, despite being “bankrupt of ideas,” Anand does a mental backflip with a degree of difficulty of 4.5 and comes up with this: “Some of the issues raised by the red shirts are, in my view, valid…”. What might these ideas that are not bankrupt be? Anand says: “the widening gap between the rich and poor, unequal opportunities.” And making exactly the same comment as Abhisit – who’s coaching who? – Anand then says: “but they have existed for a long time in our history of democratic rule [huh?] and these issues have existed in all other societies, in other countries…. These issues are not newly invented and they did not happen in Thailand only in the last few years. Every government has tried to address these issues but nobody has a quick fix.” Maybe there’s no coaching and its just that position and privilege breeds a similar outlook.

Anand and Abhisit would love to think that they are right about these big and important issues. Are there really no changes in these patterns over time? Bangkok Pundit has an excellent post on exactly this issue related to wealth and income inequality, so there’s no need for PPT to repeat that. We’d just point out that governments regularly make decisions that change these patterns, in both the short and medium terms. The fact is that if you are in the bottom half of Thai society, most governments have changed these patterns for the worse. If you are up the top, you’ve generally done very nicely. Class war at work perhaps?

Getting truly, deeply royalist, Anand warns that the red shirts can’t be trusted: “I think there’s deep suspicion, rightly or wrongly, that the reds have some other issues under a hidden agenda. I think there is this confusion about the legitimate issues and, shall we say, illegitimate questions.” Of course, he means to imply that the “reds” as he calls them are really republicans.

PPT really appreciated Anand’s comment when asked under what circumstances Thaksin might return to Thailand. We had said some time ago that this palace has a long memory for its opponents and is remarkably resolute in dealing with them. So Anand’s comment is confirmation: “I don’t see much prospect of his return. I’m not quite sure his strategy is a correct one…. in the past two years he has been perceived, rightly or wrongly, to have gone beyond the point of return in terms of his rhetoric, in terms of his actions.”

After blathering on about the usual propaganda position on the monarch’s constitutional duties and rights, a la Bagehot, Anand sounds almost apologetic for the lack of reform – “evolutionizing itself” – in the monarchy. He complains that the Thai monarchy hasn’t had much time to reform and, he complains, “you have to be fair to us, sometimes we cannot go faster than what the people want.” Blame “the people,” for it is they who don’t want the monarchy to change. That’s the language of despots.

Anand continues to make another weird statement: “there is a deep affection and deep loyalty towards our King and our constitution by an overwhelming majority of the people.” Perhaps a slip of the tongue? For we know that there’s not nearly an overwhelming majority for the 2007 Constitution. For the king perhaps? Maybe, but who knows. Would anyone in their right mind ask the question in a survey, and would any sane person answer that they dislike the king?

Still, Anand knows that succession will inevitably see the supposed popularity decline. Even now, he estimates that 10-20% of the population does not want the monarchy. He adds that a further 20-40% don’t care all that much.

Bangkok Pundit also comments on this aspect of the story and is worth a read.

Anand seems to still support Abhisit and the Democrat Party and he is convinced that the “army is not that stupid. They know they bungled the last one and the coups in the past have never been able to resolve the nation’s problems.” PPT is sure that he is wrong. The army’s silent coup of 2008 showed that they learned that running a government was tough. So they sit behind the scenes and pull whatever levers or strings that are necessary. Brokering a government and standing behind it while that government doles out money and military hardware and allows the military to do pretty much as it pleases is a very neat strategy.