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Thaksin’s Ratchada Deal

It’s a blog post, not a research paper, so I’ll skip on providing the links, the case has been in the media for years, finding some old articles I’ve seen somewhere ages ago is a bitch. I can try, if there’s sufficient interest.

Ratchada land was one of the assets taken over by FIDF from bankrupt financial companies in the 90s. At its peak it was valued at over 2 billion baht.

The location is perfect in many ways – a huge plot, not in the congested CBD or in those tiny Sukhumwit sois, in a respectable neighbourhood with Rama 9 and Ratchada glistening office blocks dominating the skyline. Certainly better than low-brow Charansanitwong somewhere across the river, a neighborhood not really befitting Thaksin’s new status as country’s best, brightest, and richest Prime Minister.

It’s also practically across the street from “Software park” building, not formally Shinawatras’, but they were supposed to be major tenants there. That building was also resurrected after 1997 death but I don’t remember which got their attention first.

It looked like a very nice setup.

FIDF tried to sell Ratchada plot several times, even before Thaksin became the Prime Minister, but there was no interest, no one was buying that kind of property then. It was put up again in 2003 and no one wanted to buy as the minimum price was considered too high.

That’s when Shinawatras stepped in.

In this second round there were only two other bidders, both had very good relationships with Thaksin, down payment was hiked from 10 million to 100 million baht, possibly to prevent some dark horses joining in at the last moment, and Pojamarn emerged as a clear winner.

The land was sold for about a third of it’s peak price and below the minimum set in the first 2003 auction round, but it was sold nevertheless, so for FIDF it was a good news.

The deal was concluded on the last day of the year, public holidays were reshuffled to make Dec 31 a working day. After New Year land valuations used to set minimal price for auctions went up by 20%. Later on there was a change in zoning permits for that area – now a high rise office block could be built on the land while during the auction it was valuated as land for residential buildings (this is the most difficult part to prove, I’ve read about it in the paper Nation ages ago, long before the coup).

Legally it was all fine and dandy, if there was collusion, it was all a matter of doing favors, no bribes needed to be paid, and people at the FIDF were just doing their jobs.

Yet it was a blatant conflict of interest – Prime Minister going into auction with the state agency? How can he possibly lose? It’s like one of those mock up contests from fairy tales, between young princes and their friends.

The law is pretty straightforward here – cannot be done, and there’s no burden of proof there was corruption, it just cannot be done.

Democrats made this sale a major point in 2004 censure debate but they didn’t have numbers to grill Thaksin, they could only charge Somkid, Finance Minister at the time. A senator has also attacked Thaksin on that, and Vishanu, govt legal wiz, explained that the deal could be illegal only if FIFD was under Prime Minister’s control.

Well, FIDF is a state institution, there’s no doubt about that. It was set by the state to help with solving banking and financial problems back in the 80s. Finance Ministry has a 70% stake in it and Bank of Thailand also has representation. Both Finance Minister and BOT governor are appointed by the Prime Minister.

Somkid had no troubles taking responsibility and answering questions about the land sale during the censure debate either.

During Thaksin’s trial the court ruled on that point overwhelmingly, too.

Some people point out at an earlier precedent when Supreme Court ruled that FIDF was independent. Well, Thai judges are not obliged to follow precedents, but, apart from this point, that old case was about a private company trying to get the government to repay FIDF loans. From that aspect it was also a clear cut case – FIDF was set up specifically so that the government doesn’t carry financial responsibility for its actions.

Throughout its history FIDF worked closely with BOT and Finance Ministry, the setup and distribution of powers allowing some room for negotiations – the govt wants to dump everything into FIDF, BOT wants to keep their debts under control, and FIDF needs to sell the distressed assets, so it’s a three way tussle. One thing is clear – FIDF is not some profit oriented private entity and politicians should be prohibited from bringing their personal business interests in dealing with it.

There are also some counter points involving the set up of the prosecuting body in this case and the court itself. Fair enough, but it’s really legal matters, and legally they have been addressed. When the case is lost, people start arguing procedures, then they argue the law itself. It’s just sour grapes and refusal to admit guilt.

One more thing about conflict on interest – no investigative or prosecuting body would take on the sitting Prime Minister, and no state agency would cooperate with that hypothetical investigation either. “Conflict of interest” needs to be nipped in the bud, just for its existence, without necessity of proving actual corruption.


15 Responses

  1. Well, as you know there are differing opinions on the Thaksin “Corruption” Case, for instance, in Fonzi’s opinion over at Thailand Jumped the Shark:


    The court never found Thaksin guilty of any collusion on the bidding.

    There was no injury to the state.

    There was no criminal conspiracy to defraud the public.

    MR Pridiyathorn Devakula signed off on the deal and testified in Thaksin’s favor.

    Potjaman was never found guilty of any crime and didn’t have the land confiscated.

    In fact, Thaksin was compelled under Thai law to sign the land transfer documents because Thailand is a community property country.

    Now, I guess one could make an ethical argument that the prime minister’s wife shouldn’t be buying land during his tenure just to keep appearances up.

    But an ethical lapse doesn’t mean one should get 2 years in the gaol.

    • It’s not “ethical lapse” – Prime Minister is prohibited by law from entering into any bidding contract with a state agency.

      As for Pojamarn – the court simply said that it has no jurisdiction over Pojamarn as she was not a political office holder herself.

      Trying to prove criminal conspiracy or injury to the state is impossible here, as it goes into “what if” scenarios. What if the Shinawatras didn’t bid? How can the court put that into legal terms? By law it is not obliged to – Prime Minster’s involvement was illegal in the first place, whatever comes next is secondary.

      But, for the sake of discussion, let’s speculate on what could have happened – the land could have been left unsold. Next year its valuation price would have increased, but there was also a property boom in the following years, in 2003 it was just starting to take off. I don’t know if being close to MRT even mattered when the plot was first put up in the middle of 2003, land speculation on “mass-transit” properties didn’t start yet.

      There was a very good chance the land would have fetched far better price if FIDF waited for one or two years.

  2. I’m still struggling to understand exactly what he was convicted of, and why the sentence imposed was 2 years.

    Was it actually ‘conflict of interest’ that he got conviced on? (that seems to be an alien concept in Thailand anyway, so why would only one particular popular PM be convicted of it, when all others are left alone?)

    My understanding is that they could not show any advantage was gained, and he was convicted on a technicality – for some reason:) they chose to impose the maximum penalty.

    If it was not a mere technicality, one would imagine there would have had been some financial compensation, or confiscation of the land – has that happened?

  3. More analysis of the case on Bangkok Pundit’s site here

    btw, I’m not saying Thaksin never did anything wrong, and PM’s family doing business with the government is ethically wrong IMO, but if thats all they can get him on then he must have been a virtual cleanskin:)

  4. More analysis of the case on Bangkok Pundit’s site (http://uk.asiancorrespondent.com/bangkok-pundit-blog/2008/10/what-did-court-find.html)

    btw, I’m not saying Thaksin never did anything wrong, and PM’s family doing business with the government is ethically wrong IMO, but if thats all they can get him on then he must have been a virtual cleanskin for Thailand:)

  5. He has been convicted for breaching Section 100 of the National Counter Corruption Act:

    Any State official shall not carry out the following acts:
    being a party to or having interest in a contract made with a Government agency where such State official performs duties in the capacity as State official who has the power to conduct supervision, control, inspection or legal proceedings;…

    Court ruled 9-0 that FIDF was a state agency and 6-3 that Thaksin had oversight of it.

    While it was only 5-4 that he violated the article 100, it was 9-0 for two year jail sentence.

    Maximum is three, btw.

  6. While it was only 5-4 that he violated the article 100, it was 9-0 for two year jail sentence

    Don’t you find that ‘interesting’? :)5555

    My other post seems to have disappeared, but it was a link to further discussion of the case over at Bangkok Pundit’s site
    (Google: Bangkok Pundit – What did the Court Find?)

    • Yes, it is interesting, maybe they just vote on the points one after another, accepting the outcome regardless of their previous positions. That is, if declared guilty, then it’s a fact and they proceed on that premise, not on their earlier, defeated opinions.

      What posts are missing, Hobby?

      You latest one was about that “First they came for..” poem. I took notice, thank you, but still it’s not an excuse to misbehave in the cyberspace.

      I like to occasionally rant myself, and sometimes my posts get deleted. No biggy, it feels good to let emotions out, just have to manage the damage.

      • The missing post was on this thread – basically only a link to the extra info on Pundit’s site, and some other comment that doesn’t really matter – Thaksin doesn’t need me to defend him, and I’m not a fan of his anyway:)

      • Hobby, on my end that post doesn’t exist. It’s not something I can approve/unapprove.

        It probably didn’t get properly uploaded.

        What was BP’s info? He’s really good at finding things, though I often disagree with the direction of his comments.

        On New Mandala I’ve seen some ngandaleg character. Something makes me think it’s actually you, perhaps I’ve seen ngangdaleg’s email address under your name somewhere.

  7. Yes, Nganadeeleg = Hobby = Me
    I thought everyone on the political sites knew that, as its been discussed years ago, and I was corrected by a few for the wrong phonetic spelling.
    (It should really be more like: Nganadirek, but I chose to keep the old spelling as thats what I have always used – also is it Bhumiphol or Bhumipon, or Farang or Falang? 🙂

    I expect it was a WordPress error or your blog settings that did not like my including a link/address – not to worry, as its easy to find the post on Bangkok Pundits old site archives – it was posted on 22 October 2008.

    btw, if you look at the history of my blog (very obscure:), I started out criticizing those who defended Thaksin, then I moved to offering suggestions for the way forward during the PPP govt/PAD protests period, then started expressing disappointment in the Abhisit government (starting with FM Kasit), then got completely disillusioned, and lately I just criticize whoever I think is being unduly supported – in a nutshell, I guess I’m just a contrarian who gets scared when I see blind faith being exhibited – in any direction:)

    Will you answer Michael’s question to you on Prachatai?
    (I would be really surprised in you were A.K., and disappointed)

    • I just read Nganadeeleg’s comment on Jakrapob on New Mandala and it didn’t sound like Hobby at all.

      I found BP’s post, thanks, will read it later.

      • I’m not sure what to make of Jakrapob – I basically agree with a lot he says, but also find he’s a bit of a drama queen (must be his propagandist background comes to the fore in the heat of battle:)

        or were you referring to my comment about Thaksin, or Jatuporn?

  8. I found BP entry you were referring to:


    It contains a reference to Fonzi’s questions mentioned by Saul earlier: http://thailandjumpedtheshark.blogspot.com/2008/10/thaksin-guilty-ratchadapisek-land-case.html

    I think it’s time to address this apparent inconsistency of the verdict – if the Thaksin was truly guilty, then why the land wasn’t confiscated? There’s a lot of talk about “community property” and that Thaksin’s guilt should affect the legality of Pojamarn’s contract and so on.

    It sounds reasonable at the first glance but there is one big BUT – there are no provisions to annul the contract or confiscate the land in article 100 of anti corruption law. There’s only jail or fine.

    Can anybody guess what Thaksin would be saying now if the court seized the property for conviction under that article?

    Even if we go in a roundabout way and argue that since Thaksin’s signature was illegal the contract should be annulled. Ok, but the seller needs only voluntary consent from the spouse, and so does the buyer. I bet there is no provision in the rules to declare the consent null and void, perhaps it could be legally challenged only if it was coerced or something.

    Gotta run now.

    • I don’t want to defend Thaksin, but I still think this conviction is about a very minor matter (for Thailand) and smacks of double standard.

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