Cabinet Shaken by Shares Scandal

[Plus]

I have not seen an English translation of the Graft Law of 2000. However, at no place can I find where the 5% rule covers only listed shares.

I'm talking about regulations set in the Interim Constitution.

It was in some interview with Sitthichai, when he consulted with his lawyers prior to taking a post.

[Jai Dee]

DPM Paiboon admits reshuffle is necessary following resignation of 2 ministers

The Deputy Prime Minister and Minister of Social Development and Human Security admits that a reshuffle is necessary following the resignation of 2 Cabinet members.

Deputy Prime Minister Paiboon Wattanasiritham (ไพบูลย์ วัฒนศิริธรรม ) said that new ministers would have to be appointed to replace Minister of Information and Communication Technology following his resignation. Mr. Paiboon revealed that work progress under the ICT Minister and the Deputy Minister of Commerce has been satisfactory. He is confident that the ICT Minister's replacement will function comparably well with the support of regular civil servants in the last 3-4 months of the government's term.

Mr. Paiboon does not believe that a replacement is necessary for Deputy Minister of Commerce Oranuch Osathanugroh (อรนุช โอสถานนท์ ) as Minister of Finance Chalongpob Susangkarn is capable of managing his ministry until the end of the government's term. Further decisions will have to be put on hold until the Prime Minister returns from the United Nations General Assembly in New York city.

Mr. Paiboon added that he would like to commend the 2 ministers team spirit and esprit de corp through their decisions to resign due to excess stock ownership.

Source: Thai National News Bureau Public Relations Department - 24 September 2007

[Old Man River]

I have not seen an English translation of the Graft Law of 2000. However, at no place can I find where the 5% rule covers only listed shares.

I'm talking about regulations set in the Interim Constitution.

It was in some interview with Sitthichai, when he consulted with his lawyers prior to taking a post.

Oh. The 2006 Interim Constitution has no provisions to penalize the ministers anyway and the 2007 Constitution has a temporary clause to exempt the interim government from rules relating to asset declaration. Therefore, although Sitthichai was Minister of ICT and his shares were technology stocks, he could not be legally held accountable regardless of whether the 5% rule related to listed or unlisted shares.

[Jai Dee]

Chart Thai leader commiserates with PM for loss of 2 Cabinet members

The leader of the Chart Thai leader commiserated with the Prime Minister over the resignation of 2 ministers from the Cabinet.

Banharn Silapa-archa (บรรหาร ศิลปอาชา) said that the National Counter Corruption Commission should not express its opinion on the appropriateness of the incident in which Minister of Information and Communication Technology Sitthichai Pokai-udom (สิทธิชัย โภไคยอุดม ) and Deputy Minister of Commerce Oranuch Osathanugroh (อรนุช โอสถานนท์ ) resigned following investigations by the Anti Money Laundering Office of their excess stock ownership. Mr. Banharn said that the National Counter Corruption Commission should instead consider the legal ramifications of the ministers' actions and make impartial statements accordingly.

The Chart Thai Party leader believes that the Prime Minister will decide whether Interior Minister Aree Wong-araya (อารีย์ วงศ์อารยะ) should resign. Mr. Banharn said that the Interior Minister is currently handling many tasks, including the nation's upcoming elections, therefore careful consideration must be made before pressuring Mr. Aree to resign. Mr. Banharn expressed his sympathy to the Prime Minister over the loss of 2 key Cabinet members after only a few months on duty.

' The Chart Thai Party leader said that appointing new ministers will take time and may delay the government's projects. He expressed his agreement with proposals to appoint Chairman of the Council for National Security Gen. Sonthi Boonyaratglin to the post of Deputy Prime Minister for National Security.

Source: Thai National News Bureau Public Relations Department - 24 September 2007

[Mid]

Commerce minister praises deputy for resignation decision

Monday 24 September 2007 05:24:13 PM (GMT+7:00)

BANGKOK, Sept 24 (TNA) - Commerce Minister Krirkkrai Jirapaet on Monday praised his deputy Oranuj Osathanonda for her courageous decision to resign her post to show responsibility following criticism on her personal shareholdings of over 5 per cent in private companies.

Mr. Krikkrai said that his deputy told him on the phone of her embarrassment with criticism from political groups and some cabinet members over her shareholdings in private firms.

The 1997 charter, which was abrogated following last year's September 19 coup d'etat, bars cabinet ministers from owning over 5 per cent of a private company.

But the 2007 constitution stipulates that the shareholding rule does not apply to the interim prime minister and his cabinet.

"To make all parties feel at ease, she has opted to resign to end any criticism. It is a pity because she is a smart and competent woman who has been able to work well all along," Mr. Krikkrai said, "and she has only three months left to work. We would like to praise her for courageous decision to show responsibility."

snip

MCOT Public Company Limited.

[Gnarpjohan]

While I can see the possible need to limit shareholdings by influential politicians to control conflicts of interest (and reduce the incentives for corruption), I somehow don't feel so upset by these lawbreakers. If they had been caught trying to favor the companies in which they hold large stakes, that would be another story and evidence of corruption.

In this case, how should the ministers have acted in order to cope with the laws? Transfer the ownership to some relatives, and there would be no problem? One could argue that doing so would not reduce conflicts of interest very much. It seems to boil down to the question: should politicians or their proxies not be allowed to hold influential stakes in business operations? I can see pros and cons to both sides of an argument here. Yes, allowing for business people with large stakes in companies to participate in politics increases the risk of corruption (government contracts favorable to own companies etc). On the other hand, some of these business folks could be competent people not prone to stealing (with no reference to the ministers involved here, I don't know much about them). Having to let go of the family business may keep them away from politics.

But yes, they apparently broke a law here.

[Plus]

If you let business people into politics, corruption is inevitable. They have friends,families, clans, they have rivals. One solution was to put their shares in a blind trust, like they do in the US, but no one has ever done this in Thailand they all transfer shares to family members, like Thaksin, and then we are asked to believe that they don't control them anymore.

Businessmen surely have skills, but they do not have the dedication to the country, they'll never work for the public good. And if they can, what's wrong with blind trusts?

Politicians are worse, of course, but at least the rule is that they are not involved in business.

>>>

Oldmanriver, all my speculations are based on this line from Sitthichai's interview:

"Did your adviser not warn you of the shareholding before you took office?

My legal adviser understood that the law only prohibited a minister from holding over 5% shares in a listed company and from being a managing director. Since my three questioned companies are not listed, I decided to quit the managing director's post and reported my status..."

http://www.bangkokpost.com/220907_News/22Sep2007_news11.php

Link is good until this Saturday.

[Old Man River]

While I can see the possible need to limit shareholdings by influential politicians to control conflicts of interest (and reduce the incentives for corruption), I somehow don't feel so upset by these lawbreakers. If they had been caught trying to favor the companies in which they hold large stakes, that would be another story and evidence of corruption.

In this case, how should the ministers have acted in order to cope with the laws? Transfer the ownership to some relatives, and there would be no problem? One could argue that doing so would not reduce conflicts of interest very much. It seems to boil down to the question: should politicians or their proxies not be allowed to hold influential stakes in business operations? I can see pros and cons to both sides of an argument here. Yes, allowing for business people with large stakes in companies to participate in politics increases the risk of corruption (government contracts favorable to own companies etc). On the other hand, some of these business folks could be competent people not prone to stealing (with no reference to the ministers involved here, I don't know much about them). Having to let go of the family business may keep them away from politics.

But yes, they apparently broke a law here.

I completely agree with your analysis. All of it.

On the main issue at hand, these ministers kind of broke a law. Well they did break the 5% provision in the Graft Law of 2000, but currently it doesn't matter. The 1997 Constitution has already been suspended, while the 2006 Constitution had no provisions to punish those that broke the 2000 Graft Laws and the 2007 Constitution contains a temporary clause exempting the interim government from share concealment issues. Hence, they broke a law that they disclosed to the government going in and one that they legally cannot be held accountable for anyway. Really, it should be a non issue, but these days everything is an issue.

[Mid]

Really, it should be a non issue, but these days everything is an issue.

got an issue now ,

three called ,

two resignations .........................

[Old Man River]

If you let business people into politics, corruption is inevitable. They have friends,families, clans, they have rivals. One solution was to put their shares in a blind trust, like they do in the US, but no one has ever done this in Thailand they all transfer shares to family members, like Thaksin, and then we are asked to believe that they don't control them anymore.

Businessmen surely have skills, but they do not have the dedication to the country, they'll never work for the public good. And if they can, what's wrong with blind trusts?

Politicians are worse, of course, but at least the rule is that they are not involved in business.

>>>

Oldmanriver, all my speculations are based on this line from Sitthichai's interview:

"Did your adviser not warn you of the shareholding before you took office?

My legal adviser understood that the law only prohibited a minister from holding over 5% shares in a listed company and from being a managing director. Since my three questioned companies are not listed, I decided to quit the managing director's post and reported my status..."

http://www.bangkokpost.com/220907_News/22Sep2007_news11.php

Link is good until this Saturday.

Plus, thanks for following up.

[Old Man River]

One solution was to put their shares in a blind trust, like they do in the US, but no one has ever done this in Thailand they all transfer shares to family members, like Thaksin, and then we are asked to believe that they don't control them anymore.

Businessmen surely have skills, but they do not have the dedication to the country, they'll never work for the public good. And if they can, what's wrong with blind trusts?

Please note that while blind trusts would be a good option, Thailand does not have trust laws. As such, blind trusts are illegal.

[John K]

Perhaps the NCCC should have another look at the Minster of Culture...

[Siripon]

The NCCC have just recommended a look back to Aree's tenure when at The Ministry Of Education in Frank's government.

General Sonthi retires on Sunday, what could be sweeter than an invitation to be Interior Minister following the resignation of Aree?

Just a thought.

[Plus]

And a good one.

That's the best place to rig elections.

>>>>

Let's see what the new organic laws say about shareholding, nominees, and blind trusts. I have no idea how it could actually work.

Clinton's trust wasn't so "blind". When he knew that they were investing in non-green businesses, he took his money out.

[John K]

For the moment Aree is on the fence in my book. Waiting for the PM to return I don’t see as bad, however the technology of today is advanced enough to allow communication over great distances. It is possible he could change his mind and just quit, but at the very least he should be closely watched until they meet to chat.

The fact he had several supporters from pro Thaksin country rally for him does not weigh in his favor. It certainly makes you wonder if he is in Thaksin’s pocket and is finding reasons to stay on to undermine things.

[hammered]

All the legal talk aside and doesnt that start to smack of Thaksin trying to dodge a corruption charge or two, this was a great opportunity for three people to stand up and say yes we made a mistake and musty accept responsibility for it and then resign. What an opportunity for the much maligned Sarayud government to show how things should be in the future. In fairness kudos for Sittichai for doing exactly this. It is such a shame that the other two didnt immediately follow.

A missed opportunity to set a standard new to Thailand.

[Jai Dee]

PM is worried about resignations of 2 Cabinet members

Prime Minister Surayud Chulanont admits that he is concerned over the resignations of two Cabinet members, namely Information and Communication Technology Minister Sitthichai Pookaiyaudom and Deputy Minister of Commerce Oranuj Osathananda. He says it is necessary for the Cabinet to be reshuffled after he returns from the 62nd United Nations (UN) General Assembly in New York, the United States of America.

Gen. Surayud says such resignations should not occur since they have not violated the law, but it would depend on the Cabinet members’ mutual decision since everyone has different views. He says he will discuss the Cabinet reshuffle following his return from the 62nd UN General Assembly. He says a few essential changes will be made; otherwise, the reshuffle would result in further difficulties.

The Prime Minister says he will have a talk with Commerce Minister Krirkkrai Jirapaet on Mrs. Oranuj’s possible replacement. However, Gen. Surayud says the replacement for ICT Minister Sitthichai would be necessary since it is an important position.

Source: Thai National News Bureau Public Relations Department - 25 September 2007

[Old Man River]

All the legal talk aside and doesnt that start to smack of Thaksin trying to dodge a corruption charge or two, this was a great opportunity for three people to stand up and say yes we made a mistake and musty accept responsibility for it and then resign. What an opportunity for the much maligned Sarayud government to show how things should be in the future. In fairness kudos for Sittichai for doing exactly this. It is such a shame that the other two didnt immediately follow.

A missed opportunity to set a standard new to Thailand.

Unlike Thaksin, didn't these three disclose their ownerships going in as they were supposed to? Unlike Thaksin, has any of these three passed laws that benefited their share ownerships?

OK, then why should they resign?

[chownah]

OK, then why should they resign?

See post #106.

[Old Man River]

OK, then why should they resign?

See post #106.

See post # 108.

You have three people who left their employments to help the country when it needed them. They disclosed all of their ownerships up front as requested. None showed any inclinations to benefit from their positions.

Sitthichai resigned quickly because he had enough. He had wanted to resign several times before this (see his recent interview) and this gave him his out. Is this the new standard people want?

[John K]

Good posts 106+, however if I may suggest you are forgetting one very crucial factor that will influence the decision making process and that is saving face. Jumping out early saves them much of the need to wade through the controversy and face. Staying in indicates other motives.

Reading the other threads, they already have Sonthi on Que when Aree drops out.

[cclub75]

OK, then why should they resign?

See post #106.

See post # 108.

You have three people who left their employments to help the country when it needed them. They disclosed all of their ownerships up front as requested. None showed any inclinations to benefit from their positions.

See : Section 260 of Part 2 "Acts detrimental to public interests", of the new Constitutiuon

Section 260. The Prime Minister or a Minister shall not be a partner or shareholder of a partnership or a company, nor retain his or her being a partner or shareholder of a partnership or a company up to the limit permitted by law. If the Prime Minister or a Minister wishes to continue receiving the said benefits, the Prime Minister or a Minister must inform the President of the National Counter Corruption Commission within 30 days as from the date of the appointment, and transfer his or her shares in the partnership or company to a juristic person which manages assets for or on behalf of others as provided by law.

Furthermore, Oranuj, deputy commerce minister : "A high-ranking official at the ministry said it was sad to see her leave, as Oranuj had been the key player in answering all questions, particularly those regarding the foreign business and retail business laws, as Krirk-krai [the Commerce Minister] was often away on overseas trips."

She is shareholder of at least 3 hotels. Hotel businesses are on the List 3 of Foreign Business Act : "Foreigners shall be prohibited from operating the businesses prescribed in List Three in which Thai nationals are not ready to compete unless permitted by the Director-General with the approval of the Committee."

So "no benefit" i don't know. But "no inclination", i'm not so sure...

Okay, they don't have legally to resign. But ethically it's obvious. Especially when one the key function of the Surayud gvt was to clean the mess up of Thaksin...

Edited September 25, 2007 by cclub75

[Jai Dee]

EC Chairman says Interior Minister’s decision will not affect work

Chairman of the Election Commission (EC), Apichart Sukhagganond (อภิชาต สุขัคคานนท์), says the interior minister’s decision to resign or remain in at post will not affect the general election at the end of the year and affirms EC is directly responsible in organizing the election, not the Ministry of Interior.

The EC chairman says the ministry only supports EC in arranging the election. As for the formation of political parties, he says EC has already accredited many parties, except the “Sae Dang” (เสธ.แดง) party of Khattiya Sawasdipol (ขัตติยะ สวัสดิผล).

EC reports that at present there are more than 40 political parties and 25 political groups which are now requesting EC to accredit them. The chairman expects that there will be more than 80 political parties competing in the general election. As for the election constituencies, the chairman says EC will finalize the matter in October.

Source: Thai National News Bureau Public Relations Department - 25 September 2007

[Mid]

Chairman of the Election Commission (EC), Apichart Sukhagganond (อภิชาต สุขัคคานนท์), says the interior minister’s decision to resign or remain in at post will not affect the general election at the end of the year and affirms EC is directly responsible in organizing the election, not the Ministry of Interior.

strike excuse #1 ........................................

[Jai Dee]

PM concerned over resignation of two ministers

Today (September, 25th) in New York, Prime Minister Surayud Chulanont says he is concerned over the resignation of two ministers, including Minister of Information and Communication Technology (ICT) Sitthichai Phokaiyaudom (สิทธิชัย โภไคยอุดม) and Deputy Minister of Commerce Oranuj Osathanonda (อรนุช โอสถานนท์).

The premier affirms the two ministers do not violate any laws by holding more than 5% of shares in private companies. He says he will hold a meeting to discuss a Cabinet reshuffle after he returns to the country, especially a person who will replace the ICT minister.

Regarding news that Chairman of the Council for National Security (CNS) Gen.Sonthi Boonyaratglin is willing to join the Cabinet, the premier says the chairman’s decision to be a deputy prime minister will not cause people to think that CNS influences the interim government. Gen.Surayud adds that his administration has only one month left and will be transformed into a caretaker government once the election decree takes effect.

Source: Thai National News Bureau Public Relations Department - 25 September 2007

[John K]

One could conceivably argue both sides if they are in violation of the law or not. Seeing as the constitution came online after they were in office, there may and should be some special considerations. Typically I have seen grace periods offered particularly when it comes to business laws allowing companies time to comply with the new law. This essentially is a business law as it involves company shares. Extending a grace period to just after the date the new government takes power would be reasonable and allow the ministers to stay in office. New ministers already know the rules as stated and would be required to comply.

I would be personally comfortable if this was the case, it seems fair and reasonable seeing as they were appointed and not elected.

[Chris Lawrence]

Its the only way to make tax free money in Thailand. Thaksin gone but what changed.

It does not matter that you are only there for a short while; you have the opportunity to change benefit.

Where are the knockers now?????

[Old Man River]

OK, then why should they resign?

See post #106.

See post # 108.

You have three people who left their employments to help the country when it needed them. They disclosed all of their ownerships up front as requested. None showed any inclinations to benefit from their positions.

See : Section 260 of Part 2 "Acts detrimental to public interests", of the new Constitutiuon

Section 260. The Prime Minister or a Minister shall not be a partner or shareholder of a partnership or a company, nor retain his or her being a partner or shareholder of a partnership or a company up to the limit permitted by law. If the Prime Minister or a Minister wishes to continue receiving the said benefits, the Prime Minister or a Minister must inform the President of the National Counter Corruption Commission within 30 days as from the date of the appointment, and transfer his or her shares in the partnership or company to a juristic person which manages assets for or on behalf of others as provided by law.

See section "I don't have a clue" which exempts the existing government from section 260 (as well as any other applicable sections). This hold harmless was because everyone in the government knew that, due to the haste the government was formed, issues like this could occur. These three certainly didn't try to hide their ownerships as they readily disclosed their holdings right from the beginning.

Why did the NCCC wait so many months before they made it public? There are no heroes and villains in this, only politics.

[hammered]

There are rumors which I havent been abkle to confirm or otherwise that a relative of Aree, possibly his son, was/is going to run as a PPP candidate in the election. This would certasinly if true explain why Samak was so defensive of Aree. The interior ministry controls the election.

Just of course for anyone who wants a conspiracy story.

Personally I think resigning to show responsibility was the right action whatever the politics may or may not be behind it all. It does set a new standard in accepting responsibility even if in the end it was all a bit belated by two of the three and more or less forced by media and public outcry. In fact a bit like a western style political resignation.

[Mid]

Aree reverses field, resigns

Today's Top Stories

Interior Minister Aree Wongarya finally bowed to the inevitable on Wednesday, resigning his office after a tumultuous week during which he insisted he never would quit despite strong public criticism.

snip

(BangkokPost.com)