Updated: Another royal moneymaker

13 03 2019

Both The Nation and the Bangkok Post has virtually identical “stories” about the property giant Siam Piwat.

The cause of of the “stories” was that the private company, “the operator of Iconsiam and Siam Paragon, will spend 70 billion baht during 2019-23 to develop two large-scale malls and acquire office towers and logistics centres…”.

Clipped from IBTimes

The “stories” point out that the firm is making money hand over fist and its monstrous Iconsiam center “alone is expected to boost revenue by 42 per cent this year.”

What neither story tells readers is that the opaque company is essentially a royal company, with Princess Sirindhorn scoring big bucks in investments that often involve personal and royal property.

So what you might say? And we’d say that readers may consider that such royal links give enormous advantages. We recently mentioned such advantages when posting on the Siam Cement Group. Then there’s the June 2017 decision by the junta to approve a plan for a 4.6-billion-baht observation tower in Bangkok without a call for bids. Why was that? Look at the partners.

For background on Siam Piwat, see this post from 2013.

How wealthy is the monarchy? We don’t know, but when estimates are made, they do not include such private companies and investments.

Update: Khaosod too has the Siam Piwat story and no mention of the royal connection.





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.





Anti-monarchy graffiti and royal wealth II

19 10 2013

This post continues PPT’s summary of the academic article “Working Towards the Monarchy and its Discontents: Anti-royal Graffiti in Downtown Bangkok,” that is authored by Serhat Ünaldi of the Department of Southeast Asian Studies, Humboldt-Universität zu Berlin. It is available (for a fee, free to subscribers or through universities that subscribe) at the Journal of Contemporary Asia.

Our earlier post concentrated on the graffiti, whereas this post is on royal ownership of valuable property. We earlier noted that the article’s analysis of the ownership of the Rajaprasong area was interesting:

The space examined here is a major part of downtown Bangkok and borders the Khlong Saen Saeb canal in the north, Ratchadamri Road in the east, Rama I Road in the south and Phaya Thai Road in the west. Based on land ownership the area can be divided into two. The western part is privately owned by Princess Sirindhorn who, as the landlord, earns the income generated from property rents directly. The eastern section is owned by the Crown Property Bureau (CPB) which manages the assets of the monarchy as an institution but whose generated income is “paid at the King’s pleasure” (p. 8).

As few researchers have ever dared publish on the private assets of the royals, the following bits and pieces from the article deserve attention. The dates are about acquisition/building/registration of the property or company:

An AP Photo

An AP Photo

The land owned by the princess comprises her palace Wang Sra Pathum (completed in 1916) and the sites of the surrounding commercial buildings: the Siam Kempinski Hotel (2010), the Siam Paragon shopping mall (2006), the Siam Center shopping mall (1973), the Siam Car Park (1994), the Siam Tower offices (1998) and the Siam Discovery shopping mall (1997).

 The CPB-owned land encompasses: the Isetan department store (1992), the Centara Grand Hotel (2008), the CentralWorld shopping mall (1989/2006), Zen department store (1989), the Offices at CentralWorld (2005), Chumchon Lang Wat Pathumwanaram (a slum community), Suan Pathumwananurak (an unfinished park) and the Wat Pathum Wanaram school (2007).

The dates are about acquisition/building/registration. There’s more:

… in the Siam-Ratchaprasong area the commercial interests of the monarchy are served not only by income from its properties, for Princess Sirindhorn and King Bhumibol are also major shareholders of the retail company Siam Piwat which operates the Siam shopping malls on Princess Sirindhorn’s land. The king holds 180,000 shares in Siam Piwat and the princess holds 4.32 million shares, most of them acquired from the Ministry of Finance and BankThai (now CIMB Thai Bank) in 2003 and 2005, respectively. This makes the royal family the second biggest shareholder of Siam Piwat. The family thus earns twice: from leasing out land to Siam Piwat and from their shares in the company. The princess could earn an estimated 1.68 billion baht (US$52.5 million) in annual rents from the mall and hotel operators in the “Siam” area, calculated on the basis of recent estimates of land prices in downtown Bangkok of 600 million baht per rai (1,600 m2), a total plot size of approximately 70 rai and a policy – followed by the CPB next door (Grossman 2011, 297) – of raising annual rents of 4% of a property’s market value. Moreover, in 2010, Sirindhorn’s share of Siam Piwat’s net income amounted to 145 million baht (US$4.7 million) or almost a quarter of the company’s total net income attributable to shareholders for that year.5 Siam Piwat itself subleases part of the land to the Siam Kempinski Hotel. The Siam Kempinski is owned by Kempin Siam, a joint venture between the Bahrain-based Al Manar capital group (49%), the Thai property developer Natural Park (35%) and Royal Wealth (16%) which, again, is co-owned by Al Manar and CPB Equity, a holding company which looks after the share dealings of the CPB. Interestingly, by setting up the aptly named company Royal Wealth together with Al Manar, the CPB helped the foreign capital group to increase its shareholding in Kempin Siam beyond 49% to become a majority shareholder in a Thai company. Moreover, the CPB not only co-owns Siam Kempinski, it also owns 86% of the shares of Kempinski Hotels S.A., a world-wide operating luxury hotel chain which manages the Siam Kempinski. In the mid-1990s the Dusit Thani Hotel Group and Siam Commercial Bank (SCB, of which the CPB holds a dominating 23.69%) invested in the ailing Kempinski group. After the 1997 financial crisis the CPB bought the shares from Dusit Thani and the SCB to “face-lift” the bank’s portfolio.

On the political economy of royalism and consumption, the author observes:

Royals often frequent the “Siam” malls whose appeal, through physical proximity to a royal palace, can hardly be replicated elsewhere in the city. Therefore, business success in the Siam area partly depends on the continued power of the monarchy’s sacred charisma. But while the monarchy lends its barami to the shopping malls it also symbiotically profits from them – and not just in terms of income generated from rents and shareholdings. Subtle references to the royal ties of the malls link the monarchy with the material progress of the Bangkok populace, yet carefully avoiding revealing the royal family’s direct financial interest in these commercial operations. As a place of conspicuous consumption, of Louis Vuitton and Ferrari, and as a “royal” mall, Siam Paragon is a double source of social distinction.

All-in-all, this is one academic paper that deserves broad attention and careful reading.








%d bloggers like this: