The Truth About Thaksin, Sondhi

[george]

The Truth about Thaksin, Sondhi

BANGKOK: -- What ‘really’ happened and is happening between Thaksin Shinawatra and Sondhi Limthongkul? It’s a question overshadowed by the issue of media freedom and growing public disenchantment with a once-popular leader.

Is there more to the potentially explosive conflict between them than meets the eye? This is the first in a series of a comprehensive look into an intriguing showdown.

It’s not all about media freedom and democracy.

The conflict between Prime Minister Thaksin Shinawatra and media owner Sondhi Limthongkul is driven mainly by business interest as the latter lost his cash cow in the government’s corral before he started firing a series of salvos at his former friend.

The pair has had a long love-hate relationship. They are former business partners in telecoms firm International Engineering Company who shared everything. A deep rift led to deadly rivalry in telecommunications sector when Thaksin moved away to start out on his own.

Thaksin had mobile phones and so did Sondhi; when Thaksin launched a satellite, Sondhi wanted to as well.

That bout in the foe-cum-friend story ended with Sondhi knocking himself out.

Nobody imagined that when Thaksin began his first term as prime minister five years ago, Sondhi would be foremost among his flatterers. He called for people to give the new prime minister a chance to run the country after the Democrat Party, in his view, took foreigners’ orders to destroy Thai-owned business, including his own Manager Media Group. Sondhi himself had ended up with huge debts after the 1997 economic crisis.

Like a phoenix rising from the ashes, Sondhi got quickly emerged from debt thanks to a creditor who forced him to declare bankruptcy. This meant that the Bt1.5 billion debt could be claimed from whatever was in his personal account for a span three years, rather than having to repay the debt over 15 or 20 years as earlier scheduled.

The reborn Sondhi quickly got stronger with support from major players in Thaksin’s government, namely chief adviser Pansak Vinyaratn, Deputy Prime Minister Somkid Jatusripitak and Finance Minister Thanong Bidaya, as well as then Krung Thai Bank chief Viroj Nualkhair.

Sondhi began to build his media empire again using his son Jitranart Limthongkul as a front to set up the company Thaiday to run the Manager website, radio, television and an English language newspaper. The rehabilitated Manager Media Group meanwhile served as a good back office.

Business was shaping up well in the beginning. Sondhi managed to tap a frequency of Public Relations Department to run programmes on the Channel 11 News One channel. He got airtime from Mass Communication Organisation of Thailand (MCOT) to broadcast radio programmes and his TV talk show “Muang Thai Rai Sabda”. Many professional journalists, including his talk show co-host Sarocha Pornudomsak, flocked to Pra Arthit Road to help Sondhi build a new media empire for good pay.

The content of all his media outlets, notably the flagship Phujadkarn newspaper, favoured the Thaksin administration. Sondhi acted as the government’s public defender, justifying all Thaksin’s policies including the populist ones.

The honeymoon quickly ended as a faction in the ruling Thai Rak Thai Party questioned Sondhi presence in state-run media and forced him out. Airtime from MCOT was running out and the channel 11 News One slot was ruled irregular.

Sondhi’s fondness for the government was wearing thin and finally torn when his close associate Viroj, former chief of Pratara Finance who fed Sondhi’s business before 1997 crisis, failed to get a second term as president of KTB. Sondhi has been sniping at Thaksin ever since.

Sondhi has got intelligent advisers. He has never told the public that business interest was the driving force in his movement against Thaksin. In stead, he used royalist ideology as a moral high ground from which to accuse Thaksin of lese majeste.

Sondhi also latched on to Thai Rak Thai member Pramuan Ruchanaseeree’s disaffection with the party after the latter wrote a book championing royal power and calling for a second political reform and a new constitution.

The ultimate goal of this political movement is to overthrow Thaksin administration, as well as its allies in parliament and independent bodies. Legal expert Amorn Chantrasomboon was brought in to help Sondhi build a political discourse for the movement and the pro-democracy Thammasat University offered forum for them to run the game.

Despite being no good for the nation as a whole, Sondhi’s royalist rhetoric is actually working, as more and more people are showing up at his weekly meetings in Lumpini Park wearing yellow T-shirts with the slogan “We will fight for the King”.

But now that the mass movement has gained momentum, Sondhi will find it is a tiger that he cannot get off so easily. He needs to carry on until either the end of Thaksin’s regime or the collapse of his media empire. The game will not be over quickly as his opponent has everything, including power and money.

Disclosures about Thaksin’s abuse of power and conflicts of interest in the government gained credibility and political support for Sondhi, who also has the backup of support from Luangta Mahabua, a prominent Buddhist monk from Udon Thani.

But financial support might be a troublesome for Sondhi as all media outlets he employed to fight Thaksin ranking from old forms newspaper to new form such as internet and satellite TV is money consuming choice. If the December 9 gathering does not deliver a knockout punch, Sondhi will need a full credit pipeline to enable him to stay in the game.

--Political Desk, The Nation 2005-11-29

[deckard]

Well for whatever reason Sondhi Limthongkul is at odds with the ### ,it's nice to see someone is outspokenly disagreeing with the polices of this cronyistic goverment.I can't see him getting away with it much longer though ,with all the odds stacked against him by way of all the head waiters cronies with there noses stuck up where the sun doesn't shine.

//edit remove a reference that is inappropriate

Edited November 29, 2005 by mattnich

[Plus+]

What is it with The Nation? "Face over substance"? If not for Sondhi we'd never knew about C130 ride for Taksin's sister, or Taksin presiding over that ceremony, and some other stuff mentioned only briefly in Nation's reports about his shows. I, for one, want to read the news, not the reason why someone puts them out there.

Don't they realise that they failed miserably as the news source compating to Sondhi?

[cclub75]

What is it with The Nation? "Face over substance"?

Indeed. I found this article a little bit strange. First it comes late.

Then, Nation seems to play the "dramatization" game (the very one the governement wants to play to save it's future...)... Look at their website ! They put a big picture of the 2 protagonist, with black background and red button...

And what is about this so called "truth" ? They try to devaluate the only truth that matters, AKA Thaksin is on the decline because of too many big scandals.

It's like to try to "dilute" the facts. Fair enough Sondhi has its own agenda and his rivallery with his former "komrade" might be a powerfull motivation (i mean more that the thai democraty). Anyway, I don't get the point of Nation, or maybe I'm getting it too well...

I believe it's manipulation. It's a simple "contre feu" that the gvt tries to inite in order to confuse public's mind.

Right now Sondhi, whatever might be his own background, serves the cause of the truth by putting public light on all the little dirty secrets of the gvt. Vampires don't like the light.

[Johpa]

Right now Sondhi, whatever might be his own background, serves the cause of the truth by putting public light on all the little dirty secrets of the gvt. Vampires don't like the light.

Sondhi and the truth in bed together is akin to Roosevelt & Churchill in alliance with Stalin. Sondhi and the Truth are only in temporary alliance as fragments of the truth provide him with momentary support for his cause. If he was in power it would be his family riding on Air Force planes. Heck, my wealthy neighbor, a retired banker, has had Royal Thai Air Force planes fly his rare birds purchased overseas up to Chiang Mai.

[george]

PART 2:

The good old days

Thaksin Shinawatra and Sondhi Limthongkul were once considered the best of pals. The second part of our special series touches on the time before things started to turn sour.

Whenever Sondhi Limthong-kul talks about Thaksin Shinawatra, he cannot fail to be reminded of the IEC episode in 1992 that marked the first rift between the two equally daring and visionary personalities.

In his book, “One must know how to lose before knowing how to win”, Sondhi wrote that before taking his telecom company IEC public in 1992, he allotted a 17.5 per cent stake in the company to Thaksin, then a rising star in the telecom industry. Thaksin bought the stake at Bt10 per share.

After the listing, IEC’s share price shot up to Bt250 apiece and Thaksin did not hesitate to take a huge profit by selling his stake.

Sondhi said Thaksin made between Bt600 million to Bt700 million from the IEC float. He got the feeling that Thaksin was a free rider and did not want to do business with him.

Sondhi felt he had contributed greatly to Thaksin’s rise as a telecom tycoon. And following the IEC episode, Sondhi always believed he didn’t owe Thaksin anything.

Sondhi entered the telecom business over a decade ago by buying Siam Cement group’s non-core handset retailer and IT firms. He also ran a thriving publishing house through the Manager Group. Among the companies he purchased were the IT firms SCT and Micronetic, and the handset retailer IEC.

IEC was the exclusive handset retailer for Nokia phones and its major customers were the two rival mobile-phone groups Advanced Info Service, which belonged to the premier’s family, and Total Access Communication (DTAC).

During the economic boom in 1995, Sondhi also got into the satellite business, following in the footsteps of Thaksin. Thaksin founded the satellite operator Shin Satellite Plc, which in December 1993 successfully launched its first conventional broadcasting satellite Thaicom 1 into orbit.

The Manager Group-led Asia Broadcasting and Communications Network (ABCN) set up its satellite project, Lao Star Co – which was worth about Bt9 billion – as a joint venture with the Lao government in 1995. Lao Star appointed Space System/Loral to build two L-Star satellites and L-Star 1 was set to officially launch to provide digital direct-to-home TV programmes in 1998. L-Star 2 was to be put into orbit in 1999.

The project was planned to serve around 2 billion people in the Asia Pacific region, including India and China. Later ABCN enlisted DTAC’s parent, United Communication Industry Plc (Ucom), to back its business.

IEC also provided a bulk of the mobile-phone airtime to DTAC before purchasing the 1800-MHz frequency from DTAC to develop its own mobile-phone operator Wireless Communication Service (WCS). WCS offered the service under the brand Digital 01.

Then came the economic crash in 1997. Sondhi’s satellite and publishing businesses faced a meltdown. His WCS was sold to the CP Group before it was renamed TA Orange. His name was completely ruined.

In 1996, Fortune magazine had put Sondhi’s assets at US$600 million (or Bt12 billion at the exchange-rate of Bt25 to a US dollar). A year later, after the crash, M Group was saddled with Bt20 billion in debt. M Group’s holding company alone had liabilities of Bt6 billion. And Manager Media had Bt4.7 billion in debt.

Sondhi ended up declaring himself bankrupt for three years. But Thaksin and his Shin empire emerged unscathed from the crisis. Indeed he ended up the country’s wealthiest man.

Yet through Somkid Jatusripitak, now commerce minister, and later on Pansak Vinyaratan, the prime minister’s chief policy adviser, Sondhi began to re-establish ties with Thaksin. Somkid wrote a column for Manager, while Pansak was editor of the now defunct Asia Times, owned by Sondhi.

The Manager Group furiously attacked the Democrat-led government over its management of the economic crisis during its time in office from late 1997 to 2000. Thaksin founded the Thai Rak Thai party in 1998, which pushed itself as a saviour for the Thai economy under the slogan “think new, act new”. Thaksin’s team found that Manager an important ally.

Sondhi was still licking his wounds. Creditors were after him and he was filed as bankrupt.

Yet “his people” marched into the Thaksin government in grand style. Somkid became finance minister. Pansak got direct access to the ears of the prime minister, acting as his chief policy adviser. And Chai-anan Samudvanija, who chaired IEC, won prominent jobs at the Krung Thai Bank and Thai Airways International. Kanok Abhiradee, the head of one of Sondhi’s companies, became president of Thai Airways and Viroj Nualkhair, who helped Sondhi with financing advice, became president of Krung Thai Bank.

Manager newspaper lauded Thaksin’s leadership, calling him Thailand’s best prime minister ever. Sondhi finally got his TV show, ‘Thailand Weekly’. He also invested in two TV channels, 11/1 and 11/2 – a split from Channel 11. And the debt that M Group owed to Krung Thai Bank was reduced from Bt1.8 billion to Bt200 million.

The start of the serious decline in Sondhi and Thaksin’s relationship was probably when the PM failed to protect Viroj last year. MR Pridiyathorn Devakula, the Bank of Thailand governor, threatened to sack Viroj if he did not resign after Krung Thai Bank was forced to reclassify some Bt40 billion as problem loans. The politicians were seen as having a nice party at Krung Thai Bank.

Manager furiously attacked Pridiyathorn, confident that Viroj would keep his presidency and Pridiyathorn would be brushed off. It was no surprise that Somkid, then finance minister, also backed Viroj staunchly – he had invited Viroj to take over as president of the state-owned bank. Somkid would also have liked to see the BOT chief sacked.

But Pridiyathorn went to see Thaksin at Government House and showed him important documents. After the meeting the PM tried to distance himself from the conflict between Somkid and Pridiyathorn, and Viroj eventually became the scapegoat, losing his KTB post.

Sondhi had also invested several hundred million in the TV business, which Thaksin later took away from him. The PM also removed Sondhi’s ‘Thailand Weekly’ programme, which Sondhi co-hosted with Sarocha Pornudomsak. This made it unlikely Sondhi would ever forgive Thaksin.

Sondhi has continued his ‘Thailand Weekly’ talk-show, holding it at Thammasat University Auditorium and in the open-air at Lumpini Park, and launched a kind of militant journalism, attacking the prime minister’s record and aiming to remove him from office altogether. This has heightened political tension. And heaven only knows how this episode will end, as the two friends-turned-foes look unlikely to make up.

--Political Desk, The Nation 2005-11-30

[Jai Dee]

Top banker warns of political repercussion on Thai economy

BANGKOK, Nov 29 (TNA) – All parties in the society should count on the democratic mechanism to solve political conflicts; otherwise the situation will worsen and affect the country’s economy and investment, warns a top banker.

Prasarn Trairattnaworakul, President of KASIKORNBANK (KBANK), said on Monday that the simmering political woes, if allowed to persist, would have an effect on investors' confidence in the Thai economy.

He called on all parties to realize the repercussion and turn to count on the democratic mechanism to function as it should be.

Mr. Prasarn said he disagreed with the undemocratic resort to solve the political conflicts because that would deteriorate the situation and undermine people and investors' confidence.

He believed the country’s financial position would not experience the stagnation because the liquidity still exists in the system albeit not high as before.

He forecast local interest rates would gradually rise by around one per cent in the middle of next year.

The Bank of Thailand (BOT)'s policy interest rate, or the 14-day repurchase rate, is likely to increase to 4.75 per cent and lending rates, particularly the minimum lending rate, are unlikely to exceed 7.5 per cent.

“Business costs won’t increase considerably as many entrepreneurs concerned because the United States Federal Reserve and the BOT have already raised the policy interest rate to the target level. So, we see no reason for both central banks to further raise it in the second half of next year,” he said. (TNA) – E005

[Ricardo]

So Sondhi & Taksin have a history together - not exactly breaking-news, but worth being reminded of.

Most Thais supported Taksin when he was first elected, including the educated & the rich, we recall the theory went that he was already a billionnaire - so would not need to raid the pork-barrel to amass further riches.

Time moves on .. and Taksin can now be judged on his actions and results, not promises of hubs or crack-downs.

Meanwhile Sondhi is throwing up a lot of stories which the government would rather Thais didn't hear, as witness their many attempts to censor him, even banning the sale of books written by him long before the current contrtemps.

He's doing a useful job for Thai democracy and the Thai people. More pwer to his elbow !

[Plus+]

When that story with Krung Thai Bank was on the fron pages Sondhi was never mentioned, and the documents Pridiyatorn showed to Taksin were not mentioned either. Who are those borrowers? Is Sondhi one of them? Now they made him to look like a central piece that holds KT jigsaw together.

From the Nation's point of view it's not the news, they were in on it all along, they just never got round to share it with readers who are now cathing up and wondering, like me, what else did they miss.

[Siripon]

Sonti is serving as a lightning rod for discontent with the incumbent PM; The Nation did an expose of his business dealings only 2 years ago, subsidiaries set up to transfer money overseas to avoid debts post 1997.

I remember the failed payments to journalists on his payroll back in 1997. The pot is calling the kettle black; but that's fair enough as they're both black,and it's only right the Thai people get to see the true state of the kitchen.

[Jai Dee]

POLITICAL UNCERTAINTY: Foreign investors ‘could get cold feet’

Thaksin/Sondhi feud may start to harm economy: Board of Trade. Foreign investors might start shifting their investments to other countries if political uncertainty continues for another three or four months, the chairman of the Board of Trade of Thailand warned yesterday.

Pramon Suthivong said businesses were facing great difficulty predicting economic prospects for next year because there were so many variables in the equation.

“As business people we would like to see political stability improving. What we are worried about is the uncertainty, which will cause economic progress to slow and investment decisions to be reconsidered,” he said.

The political uncertainty, which stems largely from media tycoon Sondhi Limthongkul’s verbal attacks on Prime Minister Thaksin Shinawatra and the consequent coup rumours, last week caused a decline in the local bourse.

Wariness has continued after Sondhi issued a call for 500,000 people to gather on December 9 to express their disapproval of Thaksin’s alleged abuses of power.

Moreover, the court verdicts to invalidate the selection process for the National Broadcasting Commission and to delay the privatisation plan of Egat Plc, have added to all the uncertainty.

Pramon said the “cloudy” political situation had already affected the stock market, and the impact might be felt in foreign direct investment if the problems linger.

“If it continues, it will definitely cause a problem [to the economy]. If it lingers for three to four months, foreign investors may move their money out [to invest in other countries],” he said.

Pramon, also chairman of Toyota Motor Thailand, said there were many factors which could jeopardise the economy next year, notably uncertainty over privatisation.

If state enterprises cannot raise funds in the equity market, the government might have insufficient funding to invest in its planned mega-projects and would have to scale down the investments, he said.

Speaking at the Board of Trade and Thai Chamber of Commerce’s semi-annual media briefing, Pramon said that during the past six months there had been many unexpected events causing businesses to adjust their plans. These include high oil prices, the drought - which hit major industries located on the Eastern Seaboard - and the bird flu, which has dented food exports.

“Now there is the upward trend in interest rates and inflation. In the South, peace has not yet returned, which also causes foreign investors to worry a lot.

“There are also the protests and the unsuccessful [Egat] privatisation, which have clouded the political situation and forced domestic and foreign investors to delay their investment decisions,” he said.

On the positive side, Pramon said exports should improve next year, since Thailand can resume shrimp exports to the European Union. Moreover, auto exports are likely to be robust in 2006.

But Pornsil Patcharintanakul, a director of CP Intertrade, said local executives were used to political uncertainties. He said the economy depended on exports, tourism and investment, the first two of which are unlikely to worsen next year.

A Western diplomat in Bangkok said he felt that all business movement in Thailand had for the moment been “paralysed” as business people are anxious to see what will happen after December 9.

Source: The The Nation - December 01, 2005