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PTT case was 'properly managed'
Ministry backs state enterprise reforms
Tuesday, March 28, 2006
The privatisation process of PTT Plc, formerly the Petroleum Authority of Thailand, was properly managed, says Piyasvasti Amranand, a former top energy technocrat.
Dr Piyasvasti, currently chairman of Kasikorn Asset Management, was the secretary-general of the National Energy Policy Office in 2001, at the time of PTT's privatisation and listing on the SET.
He insisted that PTT correctly followed all steps in the corporatisation and share listing process. ''We will look at the details that [civic groups] will raise in their lawsuit. If they question the composition of the panels created for the PTT privatisation, we are quite confident that no problems will be found,'' Dr Piyasvasti said.
Consumer groups have announced plans to file a court petition to overturn a cabinet decision to list seven state enterprises on the SET, including PTT. The move follows last Thursday's victory by anti-privatisation groups in their suit against Egat Plc at the Supreme Administrative Court.
The court voided two decrees for the Egat listing, originally scheduled for last November, on the grounds that the public hearing process was compromised and conflicts of interest existed among board members overseeing the privatisation.
The ruling also said that private land that had been seized for public use by the state enterprise had been improperly transferred to the new public company.
Dr Piyasvasti said that, in the case of PTT, the country's largest listed company by capitalisation, the qualifications of all members on the PTT privatisation panel had been carefully scrutinised.
''There were no problems of conflict of interest or involvement of politicians in the panel,'' he said.
In the Egat case, the court last week said the privatisation panel's Olarn Chaipravat had a conflict of interest, as he was also a Shin Corp director, the telecom giant that until January was controlled by the family of caretaker prime minister Thaksin Shinawatra.
Although Dr Piyasvasti said that while PTT's privatisation had not involved any conflict of interest issues, a suit could be lodged for the failure of the energy giant to split off its natural pipeline operations a year after privatisation.
PTT's listing prospectus had stated that pipeline operations would be split off to enable competing oil exploration companies to use the pipeline network.
An energy business law was also to have been passed to govern the country's electricity and natural-gas sectors.
But PTT failed to divest its pipeline operations, with executives citing changes in government policy to adopt a power pool policy and liberalise the electricity generation sector.
Dr Piyasvasti said PTT's justification was flawed, as the separation could have been done immediately and was unrelated to the power pool policy.
''Personally, I believe, however, that Egat should be privatised to help boost its efficiency and promote competition for the benefit of consumers,'' he said, adding that whether privatisation would move forward would depend on the next government.
Meanwhile, Egat president Kraisi Karnasuta said yesterday that the utility would consult with the Council of State, the government's legal advisory body, to see whether business transactions taken since its corporatisation last year should be considered void.
The court's revocation of the two decrees, both approved in June 2005, effectively means that Egat has reverted to state enterprise status.
Mr Kraisi said that the Electricity Regulatory Board, which was set up to supervise electricity policy, would not be affected by the court decision, as it had been set up under a different legal framework.
The Energy Ministry insisted that the privatisation and corporatisation process remains in the best interests of the country.
''With respect to the decision of the Supreme Administrative Court, the government would like to state that such a decision essentially pertains to processes and not the merit of government policies on state enterprise reform,'' the ministry said in a statement yesterday.
''The inadequacies identified by the court are specific to the case of Egat and are not applicable to the reform of other state enterprises ... The Thai government wishes to affirm to all parties, including investors, that state enterprise reform is an important public policy.''
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