I was scuba diving when the incident took place. When I returned I immediately asked about this rumor which was all over the news, but no one ever printed what it was. “The King has died”, I was told, and that it was German news agency that started it.
It took the government a couple of days to prove that it was false but the damage has already been done – stock exchange plunged. It wasn’t the biggest drop in one day, but it was significant to alert the authorities.
It was also soon clear that Bloomberg wasn’t German, and that it reported on the existing rumor, not started it, and the hunt for the masterminds had begun. PAD side of journalism (or yellow press, if you wish) quickly pointed fingers at Yaowapa Wongsawat, the Dragon Lady, Thaksin’s sister and people close to her.
Two weeks later everybody forget about it, but not the police. Out of the blue they arrested two people (released on bail now) and charged them for spreading false information under Computer Crimes Act. Pretty soon the public discovered that they simply translated the Bloomberg article and posted it on two websites. Freedom activists were outraged and local sites were overflowing with barrage of abuse against the police, the government, the ruling party, Abhisit, Prem and everybody else they don’t like.
To add fuel to the fire, ICT Minister, out of sheer stupidity, threatened to close some unnamed ISPs for allowing the rumor to be posted on the sites. Now the rage was directed at abuse of LM laws again.
Among all this brouhaha one simple thing was never considered (don’t these people watch crime TV shows?) – the first people brought into custody are not necessarily the prime suspects, they very well could be small fry threatened with legal actions so that they make a deal and give up the big fish.
Two days later one more suspect was arrested, at this point the reason is not known yet, and the police announced that they are close to catching masterminds. I doubt they would ever do that, but that’s a different matter.
The big picture here is that this is the case of stock manipulation and there were people who suffered, and people who made a fortune. Businessman millionaire Ekkayuth Anchanabutr alleged that a fund managed by a person close to powerful people outside Thailand (Thaksin, anybody?) has made five billion baht from the turmoil. This is not peanuts. In fact this rumor mongering business looks very lucrative. Even if you charge only 10% on the profits from the rumors you create, you’d be set up for the rest of your life just from this one case.
It must be said that Ekkayuth has thrown unproven theories before and cannot be trusted, but the sheer scale of potential profits is still impressive.
What is going to happen now? Thailand has been trying to shore up the SET for years, a case like this is a big blow to its reputation. How can they attract big investors if the exchange looks like a totally unprofessional outfit easily manipulated by people with inside knowledge, and with absolute impunity? Big fund managers do not have time nor inclination for intricacies of unspoken machinations in a small country half way across the globe.
Whether there will be any further arrest and prosecutions, the authorities will try their best not to let it happen again – so it was a lesson for the greater, long term good. Painful, but, ultimately, necessary.
The political aspect is not clear yet – were the profits just a personal matter, or were they intended for investing in some political activities – new round of red rallies, or, perhaps, new elections? Realistically, the money will never be confiscated so we should prepare for these funds to pop up sooner or later, and it won’t be pretty. I wish it was just greed and the profits stayed out of politics.
We will never see the perpetrators brought to justice in this case – it’s the cultural thing, the victim blames himself for losing guard. Better luck next time. Masterminds will be told not to try this trick again, and that will be the end of it.