Surakiart Tells Court Thaksin Failed To Heed His Strong Objection About Loan To Burma

[sabaijai]

EXIM BANK'S LOAN TO BURMA

'I warned, he didn't listen' : Surakiart

By THE NATION

Published on December 23, 2009

Surakiart tells court Thaksin failed to heed his strong objection about loan to Burma

Ousted premier Thaksin Shinawatra ordered the Foreign Ministry to help Burma get an additional Bt1-billion loan from the Export-Import Bank of Thailand (Exim Bank) despite the ministry's strong objection, Bt300 million of which might have been used to buy equipment from his telecom empire, former foreign minister Surakiart Sathirathai testified yesterday.

Surakiart, who was foreign minister in the Thaksin government from 2001-04, told the Supreme Court that Thaksin personally intervened in the total Bt4-billion loan deal with Burma back in 2003-04.

Surakiart and graft-buster Klanarong Chantik yesterday testified before the court to wrap up the prosecution's case to seize Bt76 billion from Thaksin and his former wife, Pojaman.

In cross-examining Surakiart, the defence surprisingly asked if he had knowledge of Burma using Bt300 million of the loan to buy equipment from ShinSat.

It was unclear why the defence raised the issue when it could reflect poorly on Thaksin.

Surakiart replied that he was only aware of such a purchase during the investigation by the Assets Examination Committee.

The former premier has been accused of hiding his assets illegally and abusing his office by implementing at least five government measures to benefit his family's vast shareholdings in Shin Corp, which was eventually sold to Temasek Holdings of Singapore in 2006.

The court yesterday asked for more documentary evidence and witnesses for two more hearings, scheduled for January 12 and January 14.

In his testimony Surakiart said he recalled that Burma's foreign minister, in October 2003, had officially asked for a low-interest Exim Bank loan of Bt3 billion to buy machinery, building materials and other products from Thailand.

Later on, Surakiart said, Burma sought an additional US$24-million (Bt798 million) credit line to develop its telecom infrastructure.

"As the foreign minister, I raised my objection because the government could face criticism due to the fact that the Shinawatra family was a major shareholder of Thailand's telecom giant [shin Corp].

"At the time, several countries had also imposed trade sanctions on Myanmar [burma]. Initially, there was no reaction from PM Thaksin until Myanmar's officials asked Thai counterparts at a regional meeting in Phuket if it's possible to increase the loan from Bt3 billion to Bt5 billion."

"In writing, Myanmar said it would also want to buy asphalt and building materials from Thailand. Afterwards, PM Thaksin asked the Foreign Ministry about its position. I said I'm against it.

"Then, PM Thaksin suggested that we should meet half-way. Myanmar had asked for Bt5 billion so we should give them Bt4 billion. That's the deal," recalled Surakiart, who was also deputy premier in the final year of the Thaksin government.

Meanwhile, Klanarong, a former member of the Asset Examination Committee, told the court there were at least five policy measures executed during Thaksin's tenure which caused public damage of Bt70 billion.

First, state-owned TOT lost a big chunk of revenue when the Thaksin government issued an executive decree to convert the telecom concession fees into an excise tax.

Second, TOT lost an estimated Bt60 billion in revenue after a concession contract with Advanced Info Service (AIS), a unit of Shin Corp, was amended to reduce the concession fee from a progressive rate of 20-30 per cent of revenue to a flat rate of only 20 per cent.

Third, the telecom concession contract was amended to help AIS reduce its investment requirement by Bt10 billion, thus boosting its profits.

Fourth, the satellite concession contract was amended to help ShinSat, another unit of Shin Corp, make money from the iPSTAR satellite rather than investing in a back-up satellite.

Fifth, state-owned Exim Bank was ordered to provide the Bt4-billion loan to Burma to buy services from ShinSat.

Altogether, the government's measures helped boost the share price of Shin Corp and benefited its major shareholders, he said.

Thaksin insisted last night that he was unfairly charged of being "unusually wealthy" by the post-coup Assets Examination Committee and said he had some Bt60 billion in assets before entering politics many years ago.

In his weekly Internet-based radio broadcast, he said the value of Shin Corp shares held by his family rose and fell naturally, without his political influence.

Meanwhile Thaksin insisted last night that he was unfairly charged of being "unusually wealthy" by the postcoup Assets Examination Committee and said he had some Bt60 billion in assets before entering politics many years ago.

In his weekly Internetbased radio broadcast, he said the value of Shin Corp shares held by his family rose and fell naturally, without his political influence.

-- The Nation 2009-12-23

[newsfooter][/newsfooter]

[phazey]

And thats how Burma got it's IPStar system.

[sabaijai]

Background:

2004

http://www.thaivisa.com/forum/Ipstar-Polit...ated-t7146.html

2008

http://www.satellitetoday.com/via/multimedia/23233.html

[steffi]

All you have to do is simply show how AIS, Shin's stock price moved in response to the various announcements when they happened. Should be cut and dry.

[steffi]

They will probably do a deal whereby he pays the taxes owed on the sale and gets to keep his assets.

[Mario2008]

1 post referring to non existent politician deleted, please use the proper name of a person.

[dom samui]

1 post referring to non existent politician deleted, please use the proper name of a person.

ah ah ah Name written on someone's passport isn't PROPER NAME ????

[Samuian]

They will probably do a deal whereby he pays the taxes owed on the sale and gets to keep his assets.

Halt!

It isn't THAT Easy anymore - first of all he said it's his "ilfe savings" - NOT "illgotten money"!

His daughter said it's HER money she made from 370 Mill. her mum gave her as , well pocket money, to survive.. the days after McDonalds.

Pojamarn insists half of it is her money since they divorced, some of it must belong to the gardener, the chauffeur, the lawnmower guy, the secretary, the.... well who knows, has been holding shares of these shares being sold....

So there is much work ahead..

[Bagwan]

Thaksin says he was worth 60 billion baht before entering politics? Do they pay Police Lt. Colonels that much?

[Steve2UK]

Thaksin says he was worth 60 billion baht before entering politics? Do they pay Police Lt. Colonels that much?

At the risk of attracting the predictable avalanche of irrational abuse painting me as pro-Thaksin but actually in the interests of factual accuracy, he resigned from the police in 1987 and his first political office was at the end of 1994. While still in the police, he started various business ventures which were either failures or only modestly successful and at one point he was 50 million baht in debt.

For a "quick and dirty" summary/chronology, see http://en.wikipedia.org/wiki/Thaksin_Shinawatra. For a much more comprehensive analysis of how/why "the fortune* Thaksin made over five years beginning in 1990 was quite extraordinary", see Chapter 2 ("Family and Business") in the Pasuk Phongpaichit/Chris Baker book "Thaksin" from which that quote is taken. In the same chapter and elsewhere, they make it clear that Thaksin's success as a businessman/entrepreneur (i.e. before entering politics) always involved using his political connections to secure contracts and concessions - not exactly unusual in Thailand. What he did that benefited his business interests after entering politics and while himself in office is, of course, another matter.....

* Their estimate is US$ 2 billion.

[Siripon]

When a drug dealer's money is seized I believe the court takes the lot, they don't say,'We'll just take the money you've been making since you started being a naughty boy, you can keep the rest'.

The same with corruption.

[jayboy]

When a drug dealer's money is seized I believe the court takes the lot, they don't say,'We'll just take the money you've been making since you started being a naughty boy, you can keep the rest'.

The same with corruption.

This is also the point, perfectly fair I agree, made by Korn Chatikavanij in the Bangkok Post this morning.Nevertheless the fact remains that most of Thaksin's fortune was made legally albeit in the unfair monopolistic world that is Thai big business.It is what Thaksin did in power not only the corruption but changing the rules of the game to serve his personal interests that's so reprehensible.Korn's on a somewhat risky tack as many politicians in the alliance have corrupt incidents in their past.Is he saying they too should be deprived of their wealth? Is he prepared to have an audit of his own business activities I wonder? One is still left with the impression that what drives the assault on Thaksin is a political vendetta driven by fear of his influence and national popularity (as opposed to the relatively trivial charges against him brought into the courts).

Incidentally Korn in the same interview recognises Thaksin was a catalyst for change given the great differences in Thai society.This was a point I often made on this forum only to be roundly abused by the likes of Plus etc.

[mca]

One is still left with the impression that what drives the assault on Thaksin is a political vendetta driven by fear of his influence and national popularity (as opposed to the relatively trivial charges against him brought into the courts).

It does make me wonder if Thaksin had been squeaky clean with the same influence and popularity but refused to play "the game" with certain figures what the current political situation would be. There's a good chance that his fear of assassination would be fairly justified in my humble opinion. Can't have an upstart and the proles not knowing their place in the grand scheme of things can we?

[phupaman]

Hi All.

mca. Looting Thailand for all he could get to satisfy his lust for power and greed for money With nothing to outragous,

God forbid the man ever sets foot in Thailand again. I think all the crimes this man comitted are far from trivial, and that is not even counting his war on drug's.

phupaman.

[steveromagnino]

Incidentally Korn in the same interview recognises Thaksin was a catalyst for change given the great differences in Thai society.This was a point I often made on this forum only to be roundly abused by the likes of Plus etc.

Perhaps you would prefer to be squarely abused ;-)

appy xmas - I agree with regards to the point of wealth when people say 'yeah, but he only made it through the monopolies granted to him by friends like Chavalit and Chalerm (GSM 2 watt, sattellite).'

In the late 80s and up to 1997, many of the affluent Thai families were all doing business extracting monopoly rents by securing the lucrative rights to monopolies, so it wasn't like he was the only one; in fact probably fair to say he was in the majority. He was just better at it because he got a monopoly on GSM and certain elements of mobile telephony right when it was set to go through the roof; it's kind of like being given a monopoly for whisky - his competitors were on worse deals (especially TT&T) and so effectively he was wildly successful in the single category which he could leverage to other categories - just as K Charoen in the spirits market understood better and faster than his various competitors the keys to dominating the whisky/rum market....then leveraged from that to compete in less regulated businesses such as beer, property development, etc.

There is a certain business skill to do that, just as there is a skill to run in a fully deregulated industry. And lest we think this skill doesn't exist in the west, there is an entire industry of lobbiests and policy makers who do much the same on behalf of the outdated and stupid business models that need assistance the world over.

I suppose when one understands the playing field he knew and thrived in back then, leading up to his alledged inside knowledge of the baht not being defended by Chavalit's govt and therefore being the Telco who suffered least from the baht crash (and some allege short selling to actually profit from it) it is not surprising that when threatened by the deregulation required under the new constitution and change in govt policies of the Democrats to be an open economy, he jumped at the chance to enter politics, then pushed to continue running the same protectionist business models where possible for his and his friend's interests, using increasingly sophisticated financing and less of the 'cash in an envelope' type stuff that had been a previous feature of Thai PMs such as (alledgedly) 'ratobahn rub mao" (banharn) and of course the infamous suitcases of cash required to do business (alledgedly) during the highly respected Chavalit government (highly respected as perhaps the least competent government ever seen in Thailand with a PM who is everyone's senile uncle, just like the avuncular FDR, but without polio and the brains*).

The Burma case and the trips to India as PM to secure Shinsat business are open and shut cases. Fine in the earlier era of business as a business man to do that (or pay and fun politicians to do for him).....just didn't seem so likely to fly when he was PM and was unable to buy up all media to keep what he was doing hidden.

* what...that's not funny? Too soon?

[Steve2UK]

Incidentally Korn in the same interview recognises Thaksin was a catalyst for change given the great differences in Thai society.This was a point I often made on this forum only to be roundly abused by the likes of Plus etc.

Perhaps you would prefer to be squarely abused ;-)

appy xmas - I agree with regards to the point of wealth when people say 'yeah, but he only made it through the monopolies granted to him by friends like Chavalit and Chalerm (GSM 2 watt, sattellite).'

In the late 80s and up to 1997, many of the affluent Thai families were all doing business extracting monopoly rents by securing the lucrative rights to monopolies, so it wasn't like he was the only one; in fact probably fair to say he was in the majority. He was just better at it because he got a monopoly on GSM and certain elements of mobile telephony right when it was set to go through the roof; it's kind of like being given a monopoly for whisky - his competitors were on worse deals (especially TT&T) and so effectively he was wildly successful in the single category which he could leverage to other categories - just as K Charoen in the spirits market understood better and faster than his various competitors the keys to dominating the whisky/rum market....then leveraged from that to compete in less regulated businesses such as beer, property development, etc.

There is a certain business skill to do that, just as there is a skill to run in a fully deregulated industry. And lest we think this skill doesn't exist in the west, there is an entire industry of lobbiests and policy makers who do much the same on behalf of the outdated and stupid business models that need assistance the world over.

I suppose when one understands the playing field he knew and thrived in back then, leading up to his alledged inside knowledge of the baht not being defended by Chavalit's govt and therefore being the Telco who suffered least from the baht crash (and some allege short selling to actually profit from it) it is not surprising that when threatened by the deregulation required under the new constitution and change in govt policies of the Democrats to be an open economy, he jumped at the chance to enter politics, then pushed to continue running the same protectionist business models where possible for his and his friend's interests, using increasingly sophisticated financing and less of the 'cash in an envelope' type stuff that had been a previous feature of Thai PMs such as (alledgedly) 'ratobahn rub mao" (banharn) and of course the infamous suitcases of cash required to do business (alledgedly) during the highly respected Chavalit government (highly respected as perhaps the least competent government ever seen in Thailand with a PM who is everyone's senile uncle, just like the avuncular FDR, but without polio and the brains*).

The Burma case and the trips to India as PM to secure Shinsat business are open and shut cases. Fine in the earlier era of business as a business man to do that (or pay and fun politicians to do for him).....just didn't seem so likely to fly when he was PM and was unable to buy up all media to keep what he was doing hidden.

* what...that's not funny? Too soon?

Good summary, SR. Pasuk/Baker actually make the point about Thaksin's assumed reasons for moving into politics more strongly. From the same Conclusion page of their book that I quoted from before: "Competitors understood that Thaksin's success was grounded on political links, and hence competition was as much political as commercial. Thaksin - and his rivals - were pulled deeper into politics by the nature of their business and by the logic of intensifying competition" and a few pages earlier: "He [Thaksin] stepped across the line dividing business and politics. In November 1994, Thaksin joined the Cabinet as foreign minister under the ministerial quota of Phalang Tham......... It was probably also no coincidence that the Ministry of Communications came under the Phalang Tham's quota of Cabinet posts. At the same time as Thaksin joined the Cabinet, his friend, the banker Vichit Suraphongchai, became minister of communications under Phalang Tham"

That "stepped across the line" comment seems key..... What might have been deemed acceptable as a Thai businessman using influence with those in office is plainly not (or at least less) so when he actually occupies ministerial office himself - let alone when he occupies the PM's office. Hence the standard (but in Thailand then largely ineffectual) policy of incoming ministers being required to divest themselves of their commercial interests and/or recuse themselves when a conflict of interest arises. Even in more sophisticated/developed setups, questions still get raised about, for example, just how blind the "blind trusts" can be. From my reading of the assembled details and evidence, Thaksin's arrangements were anything but blind - more like 20-20.

[Note: I don't regard any source as definitive let alone as proof, but Pasuk/Baker fairly consistently provide a wealth of relevant detail and make what I do regard as usually a strong case for their interpretations of it.]

[Steve2UK]

When a drug dealer's money is seized I believe the court takes the lot, they don't say,'We'll just take the money you've been making since you started being a naughty boy, you can keep the rest'.

The same with corruption.

This is also the point, perfectly fair I agree, made by Korn Chatikavanij in the Bangkok Post this morning.Nevertheless the fact remains that most of Thaksin's fortune was made legally albeit in the unfair monopolistic world that is Thai big business.It is what Thaksin did in power not only the corruption but changing the rules of the game to serve his personal interests that's so reprehensible.Korn's on a somewhat risky tack as many politicians in the alliance have corrupt incidents in their past.Is he saying they too should be deprived of their wealth? Is he prepared to have an audit of his own business activities I wonder? One is still left with the impression that what drives the assault on Thaksin is a political vendetta driven by fear of his influence and national popularity (as opposed to the relatively trivial charges against him brought into the courts).

Incidentally Korn in the same interview recognises Thaksin was a catalyst for change given the great differences in Thai society.This was a point I often made on this forum only to be roundly abused by the likes of Plus etc.

For myself, I'm less convinced that seizure of all drug dealers' money (even when it could be shown to have been legitimately acquired) is a directly valid comparison here. Does the same happen with the assets of bank robbers, burglars, blackmailers etc? For more on the background to/motivation for seizing "narco money", see: http://www.pbs.org/wgbh/pages/frontline/sh...views/wald.html . I can see some parallels between that and corruption cases, but I also see that the practice is not universally applied to other financial crimes - yet.......

Korn's principle, as expressed in the Bangkok Post interview, that all those politicians convicted of corruption would have "nothing to lose" (if only the proven proceeds of their corruption are seized) seems to me difficult to sustain. No loss of liberty from the prison sentence (which, granted, should certainly be longer according to the severity/scale of the corruption - and strictly applied)? No fine (unless automatic seizure of all the convicted party has is seen as being the fine - but then where's the usual discretionary proportionality of a sentence must fit the crime?)? No banning from public office - with all that that usually entails in terms of scope for personal enrichment in Thailand?

Edited December 25, 2009 by Steve2UK