Saturday, March 31, 2007


China's long journey toward property rights


Chinese president Hu Jintao on March 19 signed a decree to declare the enaction of the country's landmark Property Law. China's top legislature had adopted it after a 14-year debate and numerous revisions. The law will come into force on Oct 1, 2007. It is the first time that the protection of private property, a concept already enshrined in the Chinese Constitution, has been written into a specific law.

The law stipulates equal rules and rights for property owners of the state, collectives and individuals and defines the citizen's rights in a wide range of economic activities, from owning a piece of land or a house to using a parking space.

"The Property Law is a new milestone in the country's progress in its economic reform," said Li Weizu, a legislator attending the parliamentary session.

"The appearance of the property law is a strong symbolic indicator of the transition from the proletarian era to the propertied era," said one writer in an essay posted on Strong Nation Forum, a popular website.

For many ordinary citizens, the hope is that the law should protect them from government interference, especially illegal demolition, often conducted by estate developers conspiring with local governments in the name of urban expansion. (Search "illegal demolition" in Chinese in Google and you will find 310,000 links.)

Yang, the owner of the three-branch Beijing People Sunshine Pharmaceutical Chain Stores, said the law was a sign of a strengthening legal system that would improve investor confidence.

And with urban private home ownership levels reaching up to 80%, new owners such as Wu Weiran, a marketer for a German firm in Shanghai, said the law's guarantees were very welcome.

But in a country where socialist ideology still holds sway despite the embrace of capitalism, the road to the law's passage has hardly been smooth. Legislators had tried passing such a law on seven previous occasions. An attempt last year became bogged down in a dispute over balancing of state and private rights.

The most recent debate began last August, when a law professor at Peking University, Gong Xiantian, posted an open letter online against the Property Law draft. "The basic principle of the draft law is against the constitution and away from the socialistic direction," he wrote.

He argued that property protection in the law could shield those who stole state assets or who took bribes, a suggestion that was quickly dismissed by supporters of the draft.

Because public discussion of proposed laws is in itself very novel in China, Prof Gong's letter triggered a huge echo on the internet and drew support from people in many walks of life.

"As the gap between rich and poor grows, saying 'equality' means giving equal protection to both beggars' sticks and a few people's limousines, the shabby apartments of ordinary people and rich people's luxurious houses and villas," Prof Gong said. "It's not the equality of labour but equality of capital. What is the difference between it and capitalism?"

His viewpoint gained a lot of support, notably from many laid-off urban workers, who have nothing to show for 30 years of reforms, and their sympathisers.

But Prof Gong also has his critics, even among some of his students, who said he lacked knowledge of civil law, was delaying the process of lawmaking, and was "the enemy of the nation".

Yin Tian, also a professor at Peking University who helped draft the law, said that the critics were out-of-touch ideologues. "They don't belong to the mainstream," he said. "The establishment of a property law is aimed at solving the problem of protecting the private assets of ordinary citizens."

However, Prof Gong's open letter did have the effect of slowing the momentum toward the law's passage. The draft was sent for further revision, increasing the part about protection of state property.

Just days before the opening of the latest parliamentary session, critics of the law, including hundreds of retired officials, continued to press their opposition, circulating a new petition saying the law "overturned the basic system of socialism".

"The property law has revoked the rule that public property is sovereign and ... castrated the spirit of the constitution that distinguishes legal from illegal private assets," the petition said.

But this time the government was not as tolerant as last year. To avoid more controversy, the draft was not publicised until March 16 - the last day for legislators' voting. The media were told not to publish analysis or commentary on the property law. Two Beijing magazines, Caijing and Xiaokang, had to delay their cover stories on the law.

Why has the issue become so sensitive? With the rapid growth of China's private economy and urban middle class in cities, the country urgently need a law to deal with property disputes and encourage more investment from the private sector.

The private sector, including foreign investment, has grown to account for 65% of the gross national product and up to 70% of tax revenues.

In the late 1970s, to quiet conservative opposition voices against reform and opening up, Deng Xiaoping put forward his famous theory, "It doesn't matter whether the cat is black or white, as long as it catches mice." Ever since, the vigorous debate on socialism versus capitalism had been effectively shelved - until now.

However, with the protection of private ownership being written into law, some people who still have a strong belief on Marxism and Maoism don't want be silent again. "The law basically ignores the constitution's upholding of socialist public property as sacred and not to be violated," one analyst argued.

In fact, for many critics of the law, their discontent is not rooted in ideological reasons. What they oppose is the unfair distribution of "social wealth" caused by the reform movement that Deng touched off.

A small portion of the population, they say, has grabbed most of the social wealth while hundreds of millions have been reduced to victims, deprived of land, houses and work without reasonable compensation.

Indeed, the commentaries of Prof Gong and others have aroused nostalgia for the planned economy in which the state took care of housing, education and health care for its urban citizens.

Bangkok Post

Saturday March 31, 2007
JI bagman, arrested in Thailand, says he knew nothing

By, Agencies

The first accused Asian terrorist called at the Guantanamo Bay hearings admitted in a written statement he carried the money used for the 2003 Marriott Hotel bombing in Jakarta, but didn't know what the funds were for.

Mohammed Nazir Bin Lep, a Malaysian also known as Lillie, was arrested in Thailand, deported to Singapore and transferred to the US-run camp for accused terrorists.

According to evidence presented at the hearing, Lillie travelled to Bangkok to help move $50,000 from al-Qaeda to the militant Islamic group Jemaah Islamiya and that $30,000 of it was used for operational expenses to bomb the J.W. Marriott in Jakarta on Aug. 5, 2003.

He declined to attend the US military hearing on his case, designed to to decide whether he will continue to be held.

Instead, in a written statement, he denied allegations against him, principally that he helped transfer funds for the 2003 bombing of the Jakarta hotel in which 12 were killed.

The bombing came as security forces were attempting - successfully - to secure Bangkok for the 2003 Apec summit in November of that year.

"It is true I facilitated the movement of money," Lillie said in the statement, which was read by his military representative. "[B]but I did not know what it was going to be used for. I do not know anything about a hotel bombing."

The statement by Lillie and by his personal US military representative - the rough equivalent of a defence attorney - basically denied all involvement with Jemaah Islamiyah.

"There is no way for him (Lillie) to know what the money was going to be used for," said the American officer, whose name was not disclosed. "The money changed hands and national currencies at least five times in the six months prior to the bombings."

Detainees at Guantanamo have the right to attend or to stay away from the hearings. The process is not a trial, but aims at deciding whether detainees can continue to be held. Some will be tried, possibly this year.

According to Lilie, "I have nothing to do with JI."

But he said he knew JI operations chief Hambali - a fellow prisoner at Guantanamo and also captured in Thailand in 2003.

"It is true that I facilitated the movement of money for Hambali," Lillie said in his written statement.

He also denied he lived in Bangkok. He said he was in the city "for a short period of time as a layover during my travels to Hat Yai in southern Thailand."

Thai intelligence sources, and now Lillie's own statement, have never answered the question of what Lillie was doing in southern Thailand, where he was arrested at about the same time as a Singaporean, also a JI member.

"I was at the house (in the South where he was captured) trying to make money to fund my travels to Malaysia," he said. "I stayed at that particular house becaquse there were several other Malaysians" there.

His denials were questionable. Asked why he had a military assault rifle in his Songkhla province home, Lillie claimed that, "It is not against the law in Thailand to have an M-16 in your apartment."

Bangkok Post

Saturday March 31, 2007

Gambling on Vietnamese real estate

As Asia's latest rising star continues its meteoric rise, its property market struggles to cope with a surge in demand


Though overcrowding, quality control and government corruption are ongoing issues, the property market is still one of the hottest growth industries in Vietnam, a trend that some analysts do not expect to abate any time in the near future.

Motivated by 8% economic growth last year and the potential of easing real-estate regulations, it is not only developers that are cashing in, but also commercial banks and property funds.

The basic overall picture, according to research by CB Richard Ellis (Vietnam) released earlier this month, is rapidly growing demand in all areas - office space, residential, serviced apartment and hotels - and not enough supply. It is a picture they foresee for at least the next three to five years.

"To describe how young and new the market is, just take a look at office space. In Ho Chi Minh City we're talking about 350,000 square metres, whereas in Bangkok we're talking about 3.5 million square metres and in Jakarta four million," said Peter Dinning, the managing director of VinaCapital Real Estate Ltd, in a recent interview.

"As a result, we see almost 100% occupancy in a lot of areas."

Demand in the office segment of the market is being driven by entrepreneurs opening shop, foreign direct investors wanting to set up shop, and local firms deciding whether to trade up for something with modern amenities.

"The office market has been predominantly foreign," said Mr Dinning, "but we've seen a shift in the last two years with local companies wanting to show they can compete in the global market by upgrading, especially now the country is a World Trade Organisation member."

Short supply and strong demand has certainly driven prices higher. CB Richard Ellis quotes Ho Chi Minh City Grade-A office rental space at US$23 a square metre in the first quarter of 2006 and now estimates it at around $29.50.

The hotel segment is seeing similar growth, helped along by an influx of travellers. The Vietnam National Administration of Tourism estimates that international arrivals grew by 3% last year to 3.58 million people.

The government hopes the figure climbs to more than 5.5 million by 2010 as the country taps into the allure of its mountainous regions and 3,000-plus kilometres of shoreline.

As for the residential segment, an emerging middle class that has benefited from decreasing unemployment and consistent economic growth over the past five years is beginning to invest in property.

"Local demand is huge, though the actual number of people who can afford new homes is still very limited," said Nguyen Quoc Tuan, an associate director of research with CB Richard Ellis.This situation is likely to change, said Tuan. The hope is that Vietnam will continue its current trajectory as Asia's third fastest-growing economy through 2010.

In addition, consumers are becoming savvier about various financial products, such as home loans. Commercial banks over the last few years have begun pushing mortgages and are still in the early stages of offering long-term, fixed-rate loans to consumer who have the right credit rating.

"You can get a 12-year long term loan, but rates are still very high [for local consumers]," said Tuan. "That too should change as the market matures."

Mr Dinning added that the residential sector has potential for long-term sustainable growth because of the huge local demand, but of course there will be the usual peaks and troughs in the short run.

In the meantime, the securities market may be an alternative avenue in which to fund housing purchases. Viet Nam News and other publications have run stories in the last two months regarding small investors who have ridden the stock market wave over the past year and are cashing out.

They are taking their newfound wealth and buying real estate, a more traditional investment channel in Vietnam similar to gold and foreign currency.

Despite all the upbeat banter, analysts have issued a number of warnings targeted at consumers, property-fund managers and developers alike.

In its 2006 Real Estate Transparency Index report released earlier this month, Jones Lang LaSalle put Vietnam at 56th, right at the bottom of the list, below regional competitors such as China, in 42nd place, and Thailand, ranked 39th.

The report also indicated a strong correlation between a market's lack of transparency and the level of corruption. Again, Vietnam was at the bottom of the index.

Earlier this month, Nguyen Dinh Than, a director at state-owned Vinaconex, was found with 200 million dong (405,950 baht) in alleged kickbacks from a local contractor. The case is now before the courts.

The government also maintains tight controls on the market. Currently, foreigners are not allowed to own real estate, though there are the usual loopholes if a person is married to a Vietnamese. Secondly, overseas-based development companies must enter a joint venture with a local partner in order to invest.

Under the World Trade Organisation agreement Vietnam signed at the end of last year, lawmakers plan to liberalise the property market from now until January 2009. Foreign developers will supposedly have greater access to the market once new policies take affect.

Another negative factor is potential overcrowding in the market.

"There is a lot of money chasing too few good deals," said Rick Mayo-Smith, the managing director of Indochina Capital.

"If you plan on coming in on your own, it maybe difficult The property market [in Vietnam] is not necessarily the godsend that people say it is."

The key, he says, is a thorough understanding of the local environment and the ability to find good deals, which is not always easy given the transparency issues. He also warned that with about one billion US dollars already invested in the market, competition is tough.

Indochina Capital is expected to make 25-30% returns on its first property fund, but the second fund will be much more difficult "with the market that is much more crowded and expensive", said Mr Mayo-Smith.

Bangkok Post

Saturday March 31, 2007

An evolving landscape

The slowdown that followed the dotcom bust early in the decade promoted Asian companies to pursue - successfully - ways to increase efficiency for all players Focus

High-growth entrepreneurs in Asia increasingly recognise the great impact of product design on their companies' manufacturing performance. Some of them are now coming to appreciate, typically from day-to-day business experience, a similarly great importance of good-quality supply-chain design in the supply-chain co-ordination with their suppliers, manufacturers, distributors, retailers and customers.

This is part of the series that the Bangkok Post has been publishing on various topics such as the "Growth Challenges for Asian Entrepreneurs" series, entitled "Moving up the Value Chain: Building Design and R&D Competences", focused on the challenges that high-growth ventures in Asia face in creating value through building new capabilities, particularly in original product design.

Rapid industrialisation in the past 50 years has placed the leaders of Asian manufacturing at the forefront of implementing modern supply-chain management (SCM). Initiatives such as Just In Time, Total Quality Management and business-process re-engineering had a significant impact on the individual components of supply chains.

They eliminated non-value-adding activities and middlemen, enhanced productivity, streamlined workflows and produced tangible benefits for the majority of supply-chain participants.

Despite the improvements in the regional and global supply chains that Asian industries participated in over the decades, overall the traditional approach to SCM has nonetheless been limited to cost reduction. In many industries facing global competition, with margins rapidly shrinking, there is growing pressure on supply-chain managers to minimise procurement, production and distribution costs.

For instance, the average selling price of a personal computer has been decreasing by 10-15% per year over the past decade. In the automotive industry - for many years now beset by worldwide overcapacity - not even a 5% price reduction is negotiated between a manufacturer and its suppliers.

By contrast, research conducted by INSEAD Professor Enver Yucesan, rooted in discussions with industry players worldwide, including Asia, has put forward a different, highly dynamic and forward-looking perspective on enhancing the supply chain. This approach emphasises that in the fast-evolving Asian region, where new products and distribution channels emerge every day, Asian companies and high-growth entrepreneurs need to review their supply-chain decisions continuously.

Innovative approaches, both strategic and tactical, in supply-chain design and co-ordination, will enable Asian entrepreneurs to shift their focus from reducing costs to creating value and a sustainable competitive advantage through their SCM decisions.

In recent years, a new wave of interest among Asian companies in optimising their supply-chain systems was triggered by the post-dotcom economic downturn of 2001.

The sudden collapse of the technology markets and the resulting slowdown in the US economy saw a sharp drop in the demand for (then-) high-end consumer electronics: PCs, mobile phones and personal digital assistants.

As a result, US technology vendors such as HP and Intel cut their orders for chips and components from Asia. This left many contract manufacturers in Asia with excess capacity and rapidly rising inventory levels, which sometimes reached several quarters' worth of their manufacturing output.

As Asia's IT sector manufactured 70% of the world's components, the reduced global demand led to excess stock amounting to $5 billion each quarter. This inventory build-up in supply channels became one of the biggest issues weighing on Asia's high-tech-manufacturing industry.

As a result, entire national economies were affected. For example, Taiwan - which had for decades positioned itself as a manufacturing network integrator for leading US technology players - in 2001 encountered its first-ever economic recession, with GDP growth falling to an unprecedented minus 1.9%, a stark contrast with the double-digit growth rates of the mid-1980s.

These unforeseen developments revealed a deeper-running imbalance and volatility in the global supply chains, and the high degree of vulnerability that entrepreneurial companies in Asia shouldered. Through the logic of the existing supply-chain systems at the time, the global supply chain had worked well while the electronics and high-tech markets expanded throughout the 1990s.

But during an economic slowdown, Asian manufacturers were largely unable to forecast the sharp drop in orders. Their multinational clients, positioned on top of the supply chain, conveniently, if unintentionally, passed the responsibility for managing excess inventory one level down the chain.

The imbalance has not been limited to supply chains in the technology industries.

For example, research has documented that toy retailers, who achieve the highest sales volumes during the December holiday season, tend to overstate their needs in order to ensure sufficient inventory for this vital sales period.

This, in turn, sends an exaggerated signal to manufacturers (many of them based in Asia, especially China) who may be misguided into increasing production, thinking that there is a great market demand for their products. Another example is the grocery industry, which is renowned for thin profit margins. There is a common practice referred to as forward buying: In up to 80% of transactions between manufacturers and distributors, items are bought in advance of actual requirements to take advantage of reduced purchase prices.

As in the 2001 electronics-industry situation, the inventory is pushed on to the channel ahead of the actual demand. Demand-forecast updating is also commonplace: Manufacturing receives a demand forecast from the marketing department. Just to be on the safe side, the department inflates the forecast by 10% before sending it to suppliers. To be further on the safe side, the supplier revises the forecast upward by another 10%, etc. As the updated forecast travels upstream along the supply chain, the figures that the last supplier sees are totally detached from the market realities that the marketing department tried to capture in its original forecast.

All of these practices serve to distort the market picture. For young companies in Asia that are establishing their place in the global supply-chain ecosystems, this presents a strong disadvantage. The next chapters of this publication will outline some key directions that Asian entrepreneurs can explore in their thinking on participating in their industries' supply chains.

High-growth entrepreneurs can greatly benefit from new approaches to managing the space they occupy in these ecosystems. In particular, it is important that new ideas and best practices in supply-chain optimisation spread beyond Asia's high-tech sector to more traditional industries, and from leading industrial conglomerates to emerging, high-growth companies. (Additionally, opportunities for Asian entrepreneurs to add value in areas beyond the manufacturing of products, by adopting innovative practices in services delivery and customer interaction, were outlined in the previous "Growth Challenges for Asian Entrepreneurs" publication, "Beyond Better Products".)

In recent years, maintaining the supply chain focus on small business development has become important to governments and industry associations. A critical mass of knowledge on innovation opportunities in SCM among these segments of Asian business will go a long way toward improving Asia's weighting in the current balance of global supply-chain systems.

Bangkok Post

Saturday March 31, 2007

The new global market ecosystem

How collaboration drives value-based management strategy

In its broadest sense, supply-chain management (SCM) must be viewed as the deployment of value-based management (VBM) strategies. VBM starts with value creation through novel business models that conceive and deliver innovative products and services. SCM plays a key role in value creation through the development of a high-performance network of suppliers, channel partners and complementors.

As an enabler of value creation, supply-chain design should therefore be considered as the capability to design and assemble assets, organisations, skill sets and capabilities for a series of competitive advantages, rather than a set of activities held together by low transaction costs.

While necessary, value creation does not guarantee that the value created in an ecosystem is actually captured equally by all the members of the ecosystem. For example, whereas air travel has created tremendous value for a wide range of stakeholders, value capture has been uneven across the industry.

Airlines have been fighting hard to avoid bankruptcy, yet aircraft manufacturers, airport operators and reservation systems have been quite profitable.

This phenomenon is driven by the fact that modern supply chains are ecosystems consisting of independent entities. In other words, vertically-integrated industry structures have largely been de-integrated, creating networks with no clear command-and-control structures - hence, no central decision makers.

Furthermore, these entities are economically rational decision makers, each with their own profit-and-loss responsibilities. It is therefore natural for such entities to act locally - perhaps myopically - in striving to capture the maximum amount of value.

Research clearly demonstrates that such myopic initiatives ultimately lead to value destruction for the overall ecosystem. In other words, the entire pie shrinks as the individual entities fight to maximise the size of their own slice.

Research further shows that the destruction can be stopped only through collaboration. In a decentralised environment with no central decision maker, however, collaboration does not occur naturally.

Relevant literature advocates the deployment of "trust-based relationships" to foster collaboration. From an operational perspective, trust has two very concrete dimensions: the capability of each collaborating entity, and the associated risks and benefits. As proving capabilities and quantifying the associated risks and benefits require due diligence, trust based solutions can be, at their best, long term enablers for collaboration.

In the short term, however, we need to design and deploy adequate incentive schemes that promote collaboration not only in running the day-today operations, but also in promoting further transparency and innovation.

In other words, adequate incentives not only allocate the risks and rewards in an equitable fashion throughout an ecosystem (value capture), they also enhance its overall competitiveness (value creation).

Such incentives pave the way for trust-based relationships, which would lead to the adoption of innovative processes, organisational structures and information and communication technologies.

This report discusses collaborative practices in modern supply chains, describes their impact on value-based management and provides a number of best-in-class examples. The studies contain invaluable lessons to entrepreneurs in Asia in designing their relationships with the established giants as they integrate their young organisations into global ecosystems.

Enver Yucesan is the Professor of Operations Research at INSEAD.

Bangkok Post

Saturday March 31, 2007
From screen to showroom

Actor Dom Hetrakul sees a starring role in his life for high-end motorcycle business

Pitsinee Jitpleecheep

Actor Dom Hetrakul is preparing to scale back his activity in front of the camera, saying he now intends to devote up to 60% of his time to his passion for business Mr Dom is the main shareholder in Britbike Co, an official distributor of high-end Triumph motorcycles from the United Kingdom, in the Thai market. He and his friends set up the company with initial registered capital of four million baht.

The 30-year-old TV star and scion of the family that owns the Daily News is following a well-worn path taken by other entertainers into businesses such as food, fashion, beauty, jewellery and spas.

Methinee ''Look Kate'' Kingpayom, for example, sells her own line of lingerie. Young actress Ann Thongprasom runs a kindergarten and Pattarapol ''Paul'' Silapajan has a health and fitness centre.

''I've been in show business for 12 years. Though I still find some excitement in entertainment, the Hetrakuls are not a showbiz family but a business family,'' Mr Dom said.

In addition to turning his passion for high-performance bikes into a business, the actor also has an event-organising venture that he aims to turn into a fully fledged creative house in the near future.

Before setting up his own company to market Triumph motorcycles, Mr Dom held a small stake in the local distributor of Ducati, another storied European motorbike name. He said that demand for high-end motorcycles had been rising steadily in Thailand for the last decade and he wanted to have a major part in an international business.

Still, he acknowledges that his celebrity status is a good selling point.

''I'm not quitting showbiz at the moment because it helps us with our reputation and our connections,'' he says.

Britbike will officially open its first Triumph showroom on Royal City Avenue, off Rama IX Road, on April 9. Three more will be added in Chiang Mai, Phuket and Pattaya by the end of this year.

The company will offer a dozen Triumph bikes including the popular Rocket III Daytona 675, along with Triumph parts, clothing and accessories. The motorcycles cost between 500,000 and 1.2 million baht, prices that Mr Dom says are 20-50% cheaper than rival brands. Triumph is competing locally against Harley Davidson, BMW and Ducati.

Mr Dom said that in the first two years, the company would focus on the affordable ''modern classic'' line of Triumph bikes and later provide high-performance models to keen enthusiasts.

''We expect Triumph will be a new alternative for customers who are considering a city car as a second vehicle, or for somebody who has never owned a motorcycle before,'' he said.

''We've received good feedback from local style and speed lovers with 14 motorcycles sold in the three months since our opening. Suprisingly, up to 75% of the customers who visit our showroom are newcomers.

In its first year, Britbike aims to sell about 70 bikes and earn 50 million baht.

''There are more than 1,000 big bikes on the road and the market is still in its early stage,'' said Mr Dom.

Bangkok Post

Saturday March 31, 2007

Unique Engineering tops IPO price in healthy debut


Unique Engineering & Construction Plc (UNIQ) made a positive debut on the Stock Exchange of Thailand yesterday with share prices staying above their initial public offering level of 1.80 baht.

Market observers were closely watching the first new listing on the main board for 2007, given the indifferent performance of the SET lately. But executives said the company's strong fundamentals and bright growth prospects helped it to overcome sluggish market sentiment.

UNIQ shares opened at 1.79 baht, one satang below the IPO price, and peaked at 1.84 before closing at 1.83 baht, in brisk trade worth 193.98 million baht. The main SET closed at 673.71, up 2.09, in trade worth 8.23 billion baht.

Ashwin Ahuja, senior vice-president for investment banking of Seamico Securities, the financial adviser for the company's listing, said Unique shares were attractive for long-term investment.

''We were pleased with the share prices as we have entered the market at a time when investment sentiment was not upbeat. We hope the share prices will pick up soon,'' Mr Ashwin said.

Unique listed 625 million shares with a par value of one baht on the SET. It floated 162.5 million shares in its IPO at 1.80 baht to raise 292.5 million baht to finance expansion.

The company has two business units, high-tech infrastructure construction and property development.

Managing director Koraphat Suvivatthanachai forecast revenue would double this year from 1.27 billion baht as Unique has a backlog worth 5.4 billion baht, of which half would be realised this year. It has already secured three additional projects worth 4.2 billion baht, including the Rarm Intra-Ring Road expressway and the Bangkok rapid transport (BRT) Chong Nonsi-Krungthep bridge route.

The company is also handling two new residential projects _ the new phase of Residence in the Park in Nonthaburi and the 154-rai Unique Park housing estate in Pathum Thani.

At the end of last year, the company had contracts worth 1.95 billion baht under construction. It posted a net profit in 2006 of 40.15 million baht on revenue of 1.27 billion. Of the total revenue, 94% came from construction and the balance from property projects.

Bangkok Post

Saturday March 31, 2007
Captured insurgents 'are not Malaysians'

By Post Reporters and AFP

Prime Minister Abdullah Ahmad Badawi said there was little evidence the group of 11, caught on Wednesday with a cache of weapons and money, were Malaysians.

Mr Abdullah denied that the militants, captured recently by soldiers in Narathiwat province, are Malaysian citizens and were trained in Malaysia.

"They could be Thai nationals. It is only that they had Malaysian currency with them when they were arrested. Maybe they wanted to enter Malaysia," he was quoted as saying by the New Straits Times.

"However, without any other solid evidence, I deny that those people were Malaysians or that they were trained in Malaysia," he was quoted as saying from Saudi Arabia during a trip there.

In a related development, former interior minister Wan Muhammad Nor Matha yesterday led the Wada group in a press conference to deny the group's involvement in the southern insurgency.

He was responding to an allegation by Council for National Security chief Sonthi Boonyaratkalin against the group.

"He should have studied the issue more carefully and be mindful of the consequences of his remark," said Mr Wan Nor.

He dismissed as incredulous a confession by a suspected insurgent arrested earlier who claimed to be a Wada member. Mr Wan Nor said suspects had a tendency to lie to get themselves off the hook.

He said the group, which he heads, has carried out political activities in an open and accountable manner.

"The group has never thought of joining forces with the separatists," he said.

The southern office of the Internal Security Operations Command may ban motorcycle pillion riding by males and also ask Muslim women not to wear the all-enveloping clothes in public.

Chamlong Khunsong, the office's chief-of-staff, said it was the wish of local residents to impose a ban on pillion riding, saying it could help reduce the number of drive-by shootings.

The cooperation on clothing was sought after recent protests in the deep South saw women protesters wearing long veils to cover their faces, except the eyes.

Maj-Gen Chamlong said the army would consult Muslim religious leaders before enforcing the ban.

If all goes well, the ban could be in effect by the weekend.

Alhamad Somboon Bualuang, a former member of the National Reconciliation Commission, said the proposed ban was not a solution. "It would only fan distrust."

Two separate bomb attacks rocked Pattani yesterday, killing one military officer and injuring five others while they were making routine patrols.

In Sai Buri district, an elderly man died after a gun attack on his house yesterday.

In Yala, security troops detained Masuedee Kami, 16, who was wanted on an arrest warrant, and seized an M16 assault rifle and an 11mm pistol from him following a raid on his hideout in Yaha district yesterday.

Bangkok Post

Saturday March 31, 2007
No takers for tsunami early warning system

By Achadtaya Chuenniran


Not a single hotel in Phuket province has hooked up with the satellite-based signal receiving system because they do not trust its efficiency, and because of the cost - more than 400,000 baht, or about $13,000.

Provincial authorities have met local hoteliers twice, urging them to install tsunami early warning system gear so they can get the early warning signal directly from the Nonthaburi-based National Disaster Warning Centre (NDWC), which relays the warning via the satellite.

So far, no hotel has installed the equipment.

Phuket governor Niran Kalayanamit said hotel operators are probably convinced that they can depend solely on the tsunami warning towers built by the province. "They shouldn't think installing the satellite signal receiver was unnecessary."

The province has 19 tsunami early-warning towers.

Arun Kerdsom, Phuket's disaster prevention and mitigation chief, said hotel operators had complained about the high cost - 400,000-500,000 baht - to install the equipment, a figure disaster officials dispute.

"At first, we hoped to see at least five hotels invest in the devices under a pilot project. But that did not happen. Not a single hotel in Phuket has shown any interest in hooking up so far.

"Of the hotels in six southern provinces along the Andaman coastline, only one in Phangnga province has connected to the system," said Mr Arun.

The province is trying to come up with other tsunami warning methods as well. It could provide pagers to communities to receive tsunami warning signals, he said.

However, Smith Dharmasarojana, chairman of the National Disaster Warning Administration Committee, said every hotel in a tsunami-prone coastal area should install the satellite signal receiver.

He said the receiver would be connected to the hotel's fire alarm system, which would ring the alarm as soon as it received a warning signal.

"Hotel operators should not rely solely on the tsunami warning towers because guests will not hear the warning sound if they are in their hotel rooms. If the signal is sent through the fire alarm system, everybody will hear it," said Mr Smith.

He said each device costs 200,000 baht, not 400,000-500,000 baht as the hoteliers claim.

Krissada Tansakul, chairman of the Patong Hotels Operators Association in Phuket, admitted that none of the hotels, some 100 of them, along the famous Patong beach, had installed the equipment because they were not confident in the NDWC's early warning system.

Hoteliers were still haunted by a false alarm activated by the centre in 2005, when thousands of tourists and villagers ran for their life after hearing the tsunami siren.

"We will install the device only after the state disaster warning system is fully developed," said Mr Krissada. "The equipment is costly and we want to make sure that it is worth the investment."

At the moment hotel operators in Phuket are relying on a "manual warning system", he said.

"Our staff will activate the in-house emergency alarm as soon as they hear the warning sirens from the tsunami warning towers. All the guests will be safe from the tsunami this way," he said.

Bangkok Post

Saturday March 31, 2007
IN Brief

Amlo seeks more help

FINANCE :The Anti-Money Laundering Office (Amlo) plans to compel jewellery shop owners, gold shops and auto dealers to report large-value transactions to authorities.

Amlo chief Yuthabul Dissaman said that expanding the scope of reporting to cover large-value asset transactions was in line with international practices.

"In general, it's pretty normal for those who have ill-gotten gains to purchase expensive items such as gold, jewellery or cars," he said. "Large cash purchases in particular should be covered under the reporting requirements."

Under the current law, financial institutions are compelled to disclose large-value cash transactions to Amlo. The agency also has broad powers to investigate financial records of individuals suspected of possible money-laundering. Retail shops could be obliged to submit reports for all cash purchases worth more than two million baht under the proposed change.

The changes would require cabinet approval. Finance Minister Chalongphob Sussangkarn has said that any move to expand Amlo's powers must ensure that individual rights remain protected.

Chemical firms pay up

ENVIRONMENT :Local petrochemical companies have reaffirmed their commitment to allocate four billion baht for a two-year programme to help curb pollution in heavily industrialised Rayong province.

The budget will be integrated into the government's five-year programme to solve industrial pollution in the region, which is expected to utilise six billion baht through 93 projects.

The programme will soon be forwarded for approval by the National Environment Commission.

Reserves up $400m

FINANCIAL DATA :International reserves totalled $69.6 billion as of March 23, compared with $69.2 billion the week before, according to the Bank of Thailand.

The net forward position was $9.4 billion, compared with $9.6 billion the week before. Net claims on government were 99.3 billion baht, compared with 80.1 billion. Net claims on financial institutions were -1.097 trillion baht, compared with -1.071 trillion. Reserve money was 812 billion baht, compared with 803.6 billion the week before.

Bangkok Post

Saturday March 31, 2007
Kasikorn Securities aims to double share

Brokerage returns to parent bank's roots


Kasikorn Securities, a unit of Kasikornbank, hopes to more than double its market share to 1.5% this year from 0.6% now through a rapid expansion of new full branches and cyber branches. KSEC chairman Rapee Sucharitkul yesterday presided over the formal opening of the company's first branch at the Kasikornbank office on Sua Pa Road in Bangkok's Yaowarat district.

''It's modelled as a full-service business centre, where investors can conduct all their financial business in one location,'' he said.

Sua Pa was the site of bank's first head office when Kbank, then known as Thai Farmers Bank, was founded 61 years ago, Mr Rapee noted. ''Kasikornbank still services its clients from its very first office here. So we thought that we should also open our first branch here too.''

Mr Rapee acknowledged that the target of reaching a 1.5% market share was quite ambitious, given that KSEC has been in operation for less than two years and that market sentiment remained poor due to economic and political uncertainties.

''The market environment is poor, and it's difficult to predict the future. We can't say what the right [Stock Exchange of Thailand] target is for next year, but we can only do our best to persuade our clients to invest in stocks or alternative investments,'' he said.

KSEC doesn't plan to open any new full-service branches this year, but will instead focus on smaller, more flexible cyber branches in high-traffic areas. Cyber branches rely heavily on online trading technologies and cost less to open and operate than full-service branches.

''Investors have changed the way they trade. Instead of coming to the trading room, more investors simply call our marketing staff or use Internet trading for their orders,'' Mr Rapee said.

KSEC currently has 3,500 trading accounts, but hopes to expand to 20,000 by the end of the year, with a focus on wealthy Kbank clients.

Mr Rapee said competition was high in the securities sector, and that the broker was open to bringing in a strategic partner to strengthen its operations.

''But this would only come once we are ready to achieve our target in market share, and only if there's a clear benefit for operations,'' he said.

Since opening earlier this month, the Sua Pa branch has signed up 200 trading accounts. Ten Kasikornbank branches located in the vicinity will also help promote KSEC's securities services to their clients.

Bangkok Post

Saturday March 31, 2007
Local Schneider unit challenges Mitsubishi for top spot in automation market


Schneider (Thailand) Ltd, a subsidiary of Schneider Electric of France, aims to become Thailand's leader in automation systems this year by increasing its market share to 15% from 12% last year. The market value of automation systems in the country was five billion baht last year, with a growth rate of 10% per year during last two years, said senior marketing manager Kusol Kusolsong.

Schneider, which markets its automation systems under the tradename Telemecanique, ranked second in the market, after Japan's Mitsubishi Corp whose market share was 15%, he said.

''We will need to increase our sales revenue from the automation systems business by 20-30% this year so that the goal can be achieved,'' said Mr Kusol.

Sales of automation systems generated about 700 million baht for the company last year.

Mr Kusol attributed his optimism to rising demand for automation systems from an industrial sector that needs high production accuracy to meet the export market's requirements. The company aims to penetrate the food and beverage, oil and gas, automotive and electronics industries in the year, according to Mr Kusol.

Exhibiting at trade shows such as Assembly Tech

Bangkok Post

Saturday March 31, 2007

Notes from Kuala Lumpur


During my recent visit to Malaysia, newspapers chronicled the adventures - perhaps soon-to-be misadventures - of Lucky and Flo, two Labradors trained in Northern Ireland as the world's first specialists in sniffing out discs. The local police have them for one month, to scour areas of suspected piracy activity and locate the booty.

The dogs busted their first illegal disc-burning operation and became celebrities. Then, a few days ago, rumours began circulating that local mafia had put contracts out on the dogs' heads. Now they are being held in a safe house to avoid their assassination.

The disc bust had good timing. The Invest Malaysia conference was being held in Kuala Lumpur (I didn't attend). At least there were plenty of people around to notice the government efforts at intellectual property protection.

Who's the winner? In Penang ("Malaysia's Silicon Valley"; a beautiful, mountainous, mostly ethnic Chinese island of one million people), I visited a number of technology suppliers with very low valuations. They deserve at least fairly low valuations. Consider the competitive positioning of one, a supplier of parts for hard-disk drives (HDD).

An American HDD manufacturer is a major customer in Penang. HDD decided to open a Thai operation, so the supplier followed and opened a Thai operation too. This is not a scale business; it merely involves investing in some equipment based on your forecast production. (So it isn't a natural outsourcing candidate.) The reason HDD asked the supplier to come to Thailand was because HDD doesn't want to invest in the equipment itself. HDD is in a truly enviable position: its suppliers will make costly investments even though HDD knows their cost structures and will always squeeze them. Everything is priced in a spot market.

- urthermore, the supplier told me that the best customers are the western firms coming to Asia for the first time. They don't fully comprehend the cost savings of using Asian manufacturing, so they accept a deal that isn't as good as it should be because they're still rubbing their eyes over how much lower the costs are.

I'm reminded of tourists in a ripoff name-brand-goods market in Asia. They descend on the shops like wolves to buy a Lacoste shirt for US$20. But they're actually the sheep in the transaction; the margin and return on capital associated with this sale are typically enormous.

Nonetheless, being a merchant of fake Lacoste shirts is not ultimately a good business because, like any operation based on customer ignorance, it lacks scalability. Similarly, an industrial operation whose best customers are foreign first-timers is not a good one. With their stable customers, these suppliers are essentially acting as equipment financiers; the irony is that it's their customer whose balance sheet would elicit far more favourable terms for purchasing equipment. (HDD, meantime, is in a virtuous cycle of not needing to make capital investments.)

A buy call?I visited a dry-bulk shipper who owns smaller vessels. The executives were extremely optimistic about business, from three factors coming into play:

- The 10,000-15,000 deadweight ton (DWT) segment has experienced heavy net scrapping in recent years. In the quest for energy efficiency, people only wish to ship on larger vessels.

- Shipyards are backed up around the world for 24-30 months. (I'm aware we've all heard this juicy tidbit to exhaustion.)

- The owners of smaller ports have not made the capex outlays that dredging demands. So some ports are less usable. (Ports that might have been able to handle a slightly larger ship a year or two ago no longer can for physical reasons.)

But against this backdrop, regional economies are strong and demand is high. There will be lots of deliveries into smaller ports, with little addition of ships to service the segment and with ports that can no longer take as wide a range of ship sizes. (Is this a buy call on the dredgers?)

Isaac Schwartz is a New York-based analyst and portfolio manager at Robotti & Company, an investment adviser established in 1983. Robotti & Company ( invests primarily in the US, but also in Norway, Canada, Thailand, and Korea. He can be reached at

Bangkok Post

Saturday March 31, 2007
Businesses back trade pact

Thai-Japan deal will stimulate exports


Thailand's powerful business groups have thrown their full support behind government plans to sign a free trade agreement with Japan, believing the deal will increase exports to Japan by more than US$1 billion in the first year alone. The three bodies _ the Board of Trade of Thailand, the Federation of Thai Industries and the Thai Bankers Association _ say that the trade pact will stimulate the economy and promote greater co-operation in areas such as technology and human resources development.

Thailand's exports to Japan in 2006 were $16.43 billion, or 13% of Thailand's total of $129.74 billion.

''We have forecast the value this year to rise by 6% and fetch at least $17.5 billion without the [trade agreement]. But an additional one billion dollars can be earned once the agreement goes into effect,'' said Pornsil Patchrintanakul, deputy secretary-general of the Board of Trade.

The JTEPA _ Japan-Thailand Economic Partnership Agreement _ is the formal name for the free trade accord.

The Board of Trade hopes the pact will boost farm and agro-industry exports to Japan by 20% after Tokyo reduces or eliminates tariffs on a wide range of goods.Under the agreement, Japan's import tax on shrimp will fall to zero from the current rate of 3-6%. Other products that will benefit are chicken, canned tuna, pineapples, vegetables and tapioca flour.

Farm and agro-industry products account for about one-third of exports to Japan. Last year, farm products accounted for $1.26 billion of exports to Japan, while $2.24 billion was generated from processed farm exports, based on an exchange rate of 37.9 baht against the US dollar.

Mr Pornsil, an executive of the Charoen Pokphand Group, the country's biggest agribusiness conglomerate, conceded that large farm and food companies would gain most from the pact _ especially those with existing relations with Japan.

However, small and medium-sized entrepreneurs may also benefit from the agreement through higher demand for Thai farm goods. Thailand currently has 12,036 food processing factories including 11,606 small plants, 324 medium size and 106 large operators.

Even without the trade agreement, strict sanitary standards in Japan remain a major obstacle for Thailand's agricultural export industries, said Mr Pornsil.

Representatives from the Federation of Thai Industries are confident that the pact will also benefit textile and garment industries due to lower taxes on capital goods imports from Japan.

But some industries will see little gain from the trade agreement. Makers of steel, automobiles and petrochemicals are not expected to profit from the pact, as they are already key industries in Japan.

Prime Minister Surayud Chulanont will be in Tokyo on Tuesday to sign the trade accord, which is scheduled to take effect in September or October.

Bangkok Post

Saturday March 31, 2007

Imports slide amid low investor confidence

Thailand's current account surplus unexpectedly widened in January as sliding confidence curbed imports of machinery and consumer goods.

Official data released yesterday showed the surplus rose to $1.54 billion from $1.22 billion in December. The figure was the biggest since January 2000, and the third straight month above $1 billion. Economists had expected a $1-billion surplus.

''Imports slowed significantly as falling investments cut purchases of machinery and equipment,'' said Amara Sriphayak, senior director of the domestic economy department at the Bank of Thailand.

''Business confidence continues to drop on political concerns and a strong baht.''

Consumer and business confidence have declined amid policy reversals and political squabbles in the military-installed government.

The central bank's Monetary Policy Committee is widely expected to cut interest rates for a third time this year when it meets on April 11 to buoy growth and try to limit gains in the baht.

''Confidence must be restored to bring back investments and consumption to boost imports,'' said Isara Ordeedolchest, an economist at Tisco Securities. The surpluses were putting more pressure on the baht, he added.

The currency has climbed 1.3% this month and 2% this year on speculation that exporters are increasing demand for baht as demand for dollars to buy imports slides. The currency surged 16% against the US dollar last year.

The current account balance comprises the difference between exports and imports of goods, services, investment income and remittances. About $700 million of January's surplus came from the service and transfer account, which is mostly tourism earnings, Mrs Amara said.

The trade surplus, based on a balance-of-payments basis, widened to $808 million from $732 million in December, the central bank said. Exports in January increased by 17.8% from a year earlier to $10.4 billion. Imports rose 4%, the slowest since June, to $9.57 billion, the report said.

Manufacturing production in February expanded 5.5% from a year earlier, slowing from 8.4% growth in the previous month. Output was expected to increase 4.5%, according to 12 economists in a Bloomberg survey. Factories in Thailand used 73.5% of their capacity in February, from 76.3%.

''With slowing overseas demand and the stronger baht, most manufacturers are cutting their production to avoid excessive inventory buildup,'' said Mr Isara.

The gauge of business sentiment fell to 42.9 in February from 43.9 in January. The private investment index, measuring items such as cement sales, imports of capital goods and licensing of new factories, declined 1.8% last month, compared with January's 0.8% drop.

The private consumption index, comprising electricity use, imports of consumer goods and gasoline sales, retreated 1.2% in February, the central bank said.

Tourist arrivals last month rose 6.4% from a year earlier to 1.26 million, from 1.29 million visitors in January.

The consumer confidence index, meanwhile, fell for a fourth month in February, dropping to a six-month low. The gauge has declined for 15 of the past 17 months, gaining only in September and October of last year.BLOOMBERG

Bangkok Post

Saturday March 31, 2007

A canal-side community hopes to bring its dilapidated area back to life


Pensri Kiattisakul, a 70-year-old resident of Talad Bang Khen community in Laksi district, gazes out of her window, reminiscing about the days when the Prem Prachakorn canal that passes her wooden house was still clean and clear. Back then, the canal was crowded with boats selling food, fruit and other goods and produce, she says.

Today, the waters that slide past her house are polluted, a wooden boat left deserted and rotting on the shore serves as a reminder of when the klong was a bustling centre of the community, used for travel and trade. But no one travels through its murky waters anymore, says Mrs Pensri.

The trading community once housed hundreds of Chinese and Thai families. But it has slowly been abandoned with a vast area of land developed for a high-end real estate project and multi-million-baht golf course many years ago.

''It's a pity when you think about how large and lively this community was in the past. But now anyone falling into the canal could die because of the diseases carried by the polluted water,'' she says.

''But it's not too late for us to revive our community for future generations.''

Remaining Talad Bang Khen residents yesterday joined the ''Big Cleaning Day'' project as part of revival efforts.

Despite the scorching heat, kids and adults worked hand in hand to clean houses and the community compound.

To promote the historical value of their community, residents also helped renovate ''A Grandfather's Boat'', a century-old wooden boat once used by their ancestors, and placed it as the community's landmark.

Other ancient artifacts and buildings are also being highlighted, including a Chinese vegetarian food hall, the Tin Hua temple, and an old rice mill that dates back over 100 years. These will be preserved to serve as reminders of the heyday of this historic trading community, founded by the Chinese descendants of Tae Chiew and Hai Lam.

Chief of Laksi district Amornrat Krittayanawat said the unique community had the potential to become a tourist spot similar to the old Mon community of Koh Kret in Nonthaburi.

However, Amporn Nilto, head of Ruam Pattana community on the other side of the canal thinks differently.

Mr Amporn, who has been living in the area for 65 years, said the City should focus more on cleaning up the polluted canal and improving the environment first, instead of spending money on developing and promoting tourist sites.

''Rivers and canals were the main means of transportation in the past. Although we have roads and tollways now, we have to revive these waterways, so future generations can learn about their roots and help protect them,'' he said.

Bangkok Post

Saturday March 31, 2007
Hotels baulk at signal receiver cost

No takers for tsunami early warning system


Phuket _ Not a single hotel in tsunami-prone Phuket province has hooked up with the tsunami early warning system. Provincial authorities have met local hoteliers twice, urging them to install satellite signal receivers so they can get the early warning signal directly from the Nonthaburi-based National Disaster Warning Centre (NDWC), which relays the warning via the satellite.

So far, no hotel has installed the equipment.

Phuket governor Niran Kalayanamit said hotel operators are probably convinced that they can depend solely on the tsunami warning towers built by the province. ''They shouldn't think installing the satellite signal receiver was unnecessary.''

The province has 19 tsunami early-warning towers.

Arun Kerdsom, Phuket's disaster prevention and mitigation chief, said hotel operators had complained about the high cost _ 400,000-500,000 baht _ to install the equipment, a figure disaster officials dispute.

''At first, we hoped to see at least five hotels invest in the devices under a pilot project. But that did not happen. Not a single hotel in Phuket has shown any interest in hooking up so far.

''Of the hotels in six southern provinces along the Andaman coastline, only one in Phangnga province has connected to the system,'' said Mr Arun.

The province is trying to come up with other tsunami warning methods as well. It could provide pagers to communities to receive tsunami warning signals, he said.

However, Smith Dharmasarojana, chairman of the National Disaster Warning Administration Committee, said every hotel in a tsunami-prone coastal area should install the satellite signal receiver.

He said the receiver would be connected to the hotel's fire alarm system, which would ring the alarm as soon as it received a warning signal.

''Hotel operators should not rely solely on the tsunami warning towers because guests will not hear the warning sound if they are in their hotel rooms. If the signal is sent through the fire alarm system, everybody will hear it,'' said Mr Smith.

He said each device costs 200,000 baht, not 400,000-500,000 baht as the hoteliers claim.

Krissada Tansakul, chairman of the Patong Hotels Operators Association in Phuket, admitted that none of the hotels, some 100 of them, along the famous Patong beach, had installed the equipment because they were not confident in the NDWC's early warning system.

Hoteliers were still haunted by a false alarm activated by the centre in 2005, when thousands of tourists and villagers ran for their life after hearing the tsunami siren.

''We will install the device only after the state disaster warning system is fully developed,'' said Mr Krissada. ''The equipment is costly and we want to make sure that it is worth the investment.''

At the moment hotel operators in Phuket are relying on a ''manual warning system'', he said.

''Our staff will activate the in-house emergency alarm as soon as they hear the warning sirens from the tsunami warning towers. All the guests will be safe from the tsunami this way,'' he said.

Bangkok Post

Saturday March 31, 2007

Rift denied for not imposing emergency


Prime Minister Surayud Chulanont yesterday denied a rift between the government and the Council for National Security after the government decided against declaring a state of emergency. He stressed that the decision not to impose the emergency rule was a joint one and that it was made after all the parties, including CNS chairman Sonthi Boonyaratkalin, had expressed their views.

The decision, hailed by pro-democracy and human rights groups, came on the eve of the anti-coup protest organised by operators of the satellite-based PTV station.

Gen Surayud said the meeting also discussed other measures to keep mass rallies violence-free, without the need to invoke the state of emergency. ''We discussed not only the emergency rule, but also other options and precautions necessary to prevent violence,'' he said.

He defended Gen Sonthi for lobbying for emergency rule, saying the army chief did not ''overreact'' but made the suggestion out of concern.

Gen Sonthi said rumours about the rift were a dirty trick by opponents to stir up conflict between him and Gen Surayud.

The CNS chairman said he understood Gen Surayud's reasons for not announcing a state of emergency in the city, and affirmed that his friendship with the prime minister remains strong, adding that they talk to each other for more than one hour a day.

''It's good that we see things differently. A decision made by only one person might not be correct,'' he said.

Furthermore, an army source said most senior military officers applauded Gen Surayud's decision. They thought announcing a state of emergency would worsen the country's image, while the rallies led by PTV executives were not that threatening.

''The [PTV] group only threatened to expose the facts about Gen Sonthi's [alleged] double marriage registration. It frightened the CNS and Gen Sonthi. They don't want the group to talk about this again and that could be the reason why they are trying to prevent their rallies,'' said the source.

Bangkok Post

Saturday March 31, 2007

Siblings have to pay B5.8bn tax on profit, panel finds


After months of investigation, a probe team looking into the Shin Corp share transfer involving two children of deposed prime minister Thaksin Shinawatra has come up with a decision the siblings are liable to personal income tax. A highly-placed source said the probe team, under the Assets Scrutiny Committee (ASC), concluded yesterday that Panthongtae and Pinthongta Shinawatra were liable to personal income tax at the rate of 37% of the 15-billion-baht profit from the purchase of Shin shares, outside the Stock Exchange of Thailand (SET), from their own company Ample Rich in January last year. This means they are liable to pay 5.8 billion baht in tax.

The team, led by former revenue chief Viroj Laohaphan, will announce its conclusion on Monday _ the deadline for tax return filing.

Mr Viroj said his team had produced a 20-page probe report which showed a tax assessment for the siblings' earnings from the deal. The report was to be tabled for final approval by the ASC on Monday.

However, Revenue Department chief Sanit Rangnoi said the agency would have to wait until Monday _ the deadline for taxpayers to file their tax returns.

Mr Sanit took over as revenue chief late last year after the dismissal of his predecessor Sirote Sawasdipanich, who was found guilty of malfeasance for failing to collect a 272-million-baht tax from Bannapot Damapong, stepbrother of Mr Thaksin's wife Khunying Potjaman, in 1997 in another Shin Corp share deal.

''We'll wait until April 2 to see if they'll file their tax returns and what their evidence is,'' Mr Sanit said.

If they fail to make the payment in their filing, the agency will summon them to clarify the missing amounts, and during such time there will be a surcharge of 1.5% per month of the tax payment, added Mr Sanit.

A tax official said the siblings can still submit their tax returns online by midnight of April 2. If that is the case, it will take the agency a few days to process their information. However, the tax law allows the pair to appeal against the Revenue Department's ruling.

The siblings bought 329.2 million Shin shares from their own company Ample Rich in January last year at one baht apiece when the market value was 49.25 baht per share. The Shinawatra family then said the deal was tax- exempt because it was made through the SET.

According to the source, the investigation was sluggish because the siblings kept providing additional information.

According to the source, the conclusion on this tax assessment was made on the price difference of the shares. The focus was on the deal between Ample Rich and the siblings outside the market.

The probe team, citing a Finance Ministry tax ruling, agreed that the income was incurred upon the acquisition of the shares and thus was liable to taxation whether or not the shares were sold later inside or outside the market.

Bangkok Post

Saturday March 31, 2007
B101bn damages sought from iTV

Station charged with concession breach


The public prosecution yesterday charged iTV Plc in court with breaching a concession contract to operate the iTV station, now renamed TITV. In the indictment filed in the Administrative Court by Banlang Pinsakol, the prosecutor in charge of administrative cases, iTV Plc was accused of a concession contract breach causing damage worth 101 billion baht to the state.

According to Mr Banlang, the damage claim in the case is the highest ever accepted for consideration by the Administrative Court.

The 101-billion-baht damage claim consists of 2.8 billion baht in overdue concession fees plus interest of 571 million baht, and a fine of 97.76 billion baht plus a 7.5% interest rate.

The fine was imposed because iTV had changed programme content without permission from the state, and because it failed to hand over broadcast equipment to the state.

On July 3, 1995, the Prime Minister's Office granted iTV Plc a 30-year concession to run a UHF television station. It recently revoked the concession after iTV failed to pay overdue concession fees and fines.

Meanwhile, civic groups are seeking talks with Prime Minister Surayud Chulanont on the setting up of public television stations that are truly independent of political and business influence.

Rosana Tositrakul, head of the Anti-Corruption Network of 30 NGOs, said a discussion should be held after a hearing on April 5 on how TITV should be restructured for greater independence.

Ms Rosana said the government could make TITV the country's first public television station to show it sincerely wanted to rid the mass media of undue influence.

She was speaking at a seminar on Public Television: Is It an Intellectual Quest of the People?, organised by the National Health Foundation yesterday.

The government should not wait for the National Legislative Assembly (NLA) to pass the Public Broadcasting Organisation bill before setting up a public television station.

The NLA's legislative process was time-consuming, and she was uncertain whether the bill would materialise if left in the hands of NLA members.

Reform advocate Prawase Wasi criticised the government for not showing a clear stance on the issue of public television and the media.

He said he had proposed several ways to make this happen but his proposal fell on deaf ears.

''We have prepared everything for this government, but it doesn't know how to proceed with it,'' Dr Prawase said.

''Independent media will be an effective tool for democratic progress,'' he said.

Somkiat Tangkitvanich, a Thailand Development Research Institute researcher who helped draft the bill, said it was time the country had commercial-free television and media.

People have become aware of their right to receive information unhindered. He said the bill suggested ways in which public television could be financed, including tax and donations.

Bangkok Post

Saturday March 31, 2007

Interior warns governor to sort out pollution or be transferred


The Interior Ministry will punish Ang Thong's governor if he fails to sort out the recent pollution in the Chao Phraya river. During a meeting to solve the water pollution problem, Deputy Interior Minister Banyat Chansena threatened to transfer Ang Thong governor Wiboon Sa-nguanpong out of the province if he proves incapable of the task, according to a source at the meeting.

A joint committee on solving water pollution in Ang Thong and Ayutthaya provinces held a meeting yesterday to discuss solutions to the contamination.

The meeting was attended by Mr Banyat, Deputy Industry Minister Piyabutr Cholvijarn, representatives of the Department of Industrial Works, the Pollution Control Department, the Marine Department, and the Ang Thong and Ayutthaya governors.

The source said Mr Wiboon presented evidence at the meeting accusing a monosodium glutamate factory on Ayutthaya-Ang Thong road of encroaching on the river. The governor got the evidence from the Marine Department, the source said.

Fish farmers believe the factory caused the water pollution that led to massive deaths of fish in pens on March 12.

According to the source, Mr Piyabutr was dissatisfied with staff of the Industrial Works Department who failed to produce documents on KTMSG Co, the MSG producer, including a blueprint for its factory.

The Department of Special Investigation (DSI) sent a team of investigators to Ang Thong's Pa Mok district to look into the water pollution.

Villagers in Pa Mok, who suffered major losses in the river pollution earlier this month, accused KTMSG Co of discharging waste water into the Chao Phraya river.

Col Surasak na Lampang, the team leader, said they gathered plenty of information, which will be sent to the DSI to consider whether to treat the case as a special one and accept it for investigation.

Bangkok Post

Saturday March 31, 2007

Obec plans to amend act to allow transfers


The Office of the Basic Education Commission (Obec) plans to amend the Teacher and Education Personnel Regulation Act to allow educational zone administrators to transfer school directors who hit their students to non-teaching positions outside educational institutions. The planned amendments followed a physical assault case involving a school director in Sa Kaeo who struck 10 pupils on the head with her high-heeled shoes on Tuesday.

Angry parents and residents have demanded the transfer of Paveenrat Vechsathon from Ban Klongmee school in Muang district. The parents also lodged a complaint with police demanding that legal action be taken against the school director.

Obec secretary-general Kasama Voravan na Ayudhya yesterday said the commission would raise the case of Mrs Paveenrat for discussion with the Office of Teacher and Education Personnel Commission about amendments to the Teacher and Education Personnel Regulation Act to give power to education zone administrators.

She said Obec faced legal obstacles in handling such cases, adding that the best the agency could do was to move school directors to other schools, not to non-educational establishments.

The commission felt uneasy with this legal obstacle, she said.

Unless the act is amended, she said school directors facing transfer may bring their cases to the Administrative Court.

Khunying Kasama said the commission has yet to launch an inquiry into the case.

However, it has ordered the office of education zones supervising Ban Klongmee School to look into the past behaviour of Mrs Paveenrat to see if she has been abusive.

An initial report showed the school director was a devoted person but had a quick temper.

She also had problems with local residents, said Khunying Kasama.

Anek Iem-tor, 53, whose son was one of the 10 pupils punished by Mrs Paveenrat, said he and other parents met her on Wednesday to ask about the incident. She told them she was sorry and said they should demand compensation, said Mr Anek, adding most parents felt she showed no sign of remorse and wanted her to be transferred from the school.

They also threatened to stage a rally to get her thrown out if no action was taken.

Bangkok Post

Saturday March 31, 2007

The trouble with men : what they may, should and have to, do


Dresden, Germany _ Advertisements shown during sport programmes symbolise the wide spectrum of the dilemma facing men today: men should not only drink beer, drive cool cars, be handy when it comes to DIY as well as be attentive fathers, but they should also have the most up-to-date shaving technology, know about anti-wrinkle eye creams and have the perfect tan. Many men feel overwhelmed by these demands because what's missing among all those confusing messages is a unifying ideal.

In short: men are experiencing a crisis and are less able to make decisions when it comes to knowing what to buy or how to behave properly in the company of women.

''It's getting increasingly difficult to say what men should and can be allowed to do,'' says Holger Brandes from the Protestant High School of Social Work in Dresden.

Today, there is a lot of room for interpretation between the images of the kind-hearted softy and the macho man.

''In effect, men are the social-psychological problem zone of the 21st century,'' explains Eike Wenzel, a trend-researcher at the Zukunftsinstitut (Future Institute) based near Frankfurt.

For years men have been becoming softer and more emotional. Reasons for this development include changing demands in society and not least women's altered expectations.

Despite the desire for an understanding partner and a responsible father, women still feel the need for what are perceived as manly characteristics.

''Men should not be 'softies', they should also be self-confident,'' says Prof Brandes.

That explains why many women believe there is still a connection between dominance and sexual attraction, even if that belief is only subconscious.

Men are caught between a rock and a hard place and their biggest problem is to find a way out of this dilemma in their daily lives.

For example, Jan Schaumann, a stylist from Berlin, believes men should put their ''softer side'' on display.

On the first date, and after inviting a woman home, Mr Schaumann says a man should not be afraid to leave the self-tanning lotion and anti-wrinkle cream standing openly in the bathroom.

''Men should deal with things like that in a very self-conscious manner,'' says Mr Schaumann.

Nevertheless, the well-groomed stay-at-home type is not the most sought-after image.

Although men are indeed becoming softer, Ms Wenzel says she has detected a return to the traditional values of the masculine man.

The fictional character James Bond as played by actor Daniel Craig incorporates the image of the man who is not always nice.

Mr Schaumann believes that's the way things should sometimes be but draws the line at allowing behaviour to be dictated on the hoof. He recommends keeping blue jokes exclusively amongst male friends: ''That has something to do with respect,'' says Mr Schaumann.

As in so many other cases the way to go is somewhere in the middle between macho and softy.

That might be a tall order for some men to achieve, but it does at least hold out the prospect of other opportunities; men just have to learn how to use them, according to Eberhard Schaefer, head of the Father Centre in Berlin.

''Men want to take on new roles, but it is made difficult for them in many areas,'' he says.

Along with the working environment he believes women also have a role to play. ''Men also need the support of women in finding a role for themselves.''

Mr Schaefer advises women to stop making fun of men if they attempt to change and they should show more patience.

That includes areas of daily life such as cooking, even when the man appears a little out of place, and only has time at the weekend.

Other situations also offer opportunities to follow a path between elegance and classical male attributes.

''The best way to show a woman which side their bread is buttered on is to open the door for them,'' says Mr Schaumann.

In the age of central locking it's very rare for a man to hold a car door open for a woman, ''But the effect is enormous.'' DPA

Bangkok Post

Saturday March 31, 2007

The right to protest

I congratulate PM Surayud on concluding that the anti-coup protests are a political, rather than military, problem, and allowing public gatherings within the law. I trust that he and, hopefully, Gen Sonthi, will agree with Louis D Brandeis, who said, "Those who won our independence believed that freedom to think as you will and to speak as you think are means indispensable to the discovery and spread of political truth; that without free speech and assembly discussion would be futile; that with them, discussion affords ordinarily adequate protection against the dissemination of noxious doctrine; that the greatest menace to freedom is an inert people; that public discussion is a political duty; and that this should be a fundamental principle of the government."

Thus, I see no reason for the authorities to block people from joining anti-coup protests. On the contrary, the police and military must make every effort to ensure the protests are peaceful and respect other people's rights, e.g. keeping pro- and anti-junta groups separate, or ensuring the free flow of traffic. The protesters should cooperate with the authorities by respecting the letter and spirit of all laws, speaking like statesmen and not demagogues, and appointing protesters as marshals to help keep the peace. Speakers should be constructive, and propose solutions.

Speak out, within the law, to help we the people decide where we want our government to lead us.



Dodgy deal at airport

King Power must surely be in crisis now, having had their flagship contract at Suvarnabhumi cancelled. It's not the final word, however, for they still have the right to re-tender under a more transparent bid. They might feel a little hard done by, considering AoT is equally at fault in the process, and could quite fairly claim damages for their investment cost so far.

Nonetheless, they entered into this dodgy agreement with full knowledge of the collusion and should now suffer the consequences, so that it might serve as a stark warning to other dodgy, large tender bids.

At the same time, charges should be brought against those AoT board members who were party to the arrangement, and provisions (financial and otherwise) made for the innocent sub-lessees. As with many other things at Suvarnabhumi, it is a complicated mess and right from the start the retail aspect of this airport has been far from transparent, sensible or just.

The breach of agreement, specifically regarding exceeding allocated space, should be strongly considered when and if King Power submit a fresh bid.



Let's leave it 'Muang'

Stephan Grimm's criticisms of your newspaper and previous Postbag writers who were against the spelling of "Mueang", were somewhat high-powered and yet against good sense ("Getting it right", Postbag, March 30).

Even if it is true that the spelling of "Mueang" has the support of the column in Learning Post's "Phut Phasa Thai", the official Romanisation System of the Royal Institute, the United Nations Group of Experts on Geographical Names in 2002, it is still against our good sense in accepting the spelling of "Mueang".

Officialdom cannot suppress one's ingrained good sense just because of the outlandish academic justification which had yet to be spelt out in his letter.

To ask the Bangkok Post to use "Mueang" for consistency sake is rather arbitrary, since most have been using the word "Muang" for ages.

I have yet to see someone other than the airport directly adopting the word "Mueang". Would the companies with the name "Muang" change their spelling to "Mueang"? Do you think Muang Thai companies or Muang Thong Thani stadium and exhibition halls would change to Stephan Grimm's liking of "Mueang Thai" and "Mueang Thong"? The change would be commercially damaging to their brand.

On the contrary, using Grimm's consistency basis, the airport director should stick to the old name, Don Muang, since others are unlikely to change to his "Mueang".



Back to red screens

Now that the Alcohol Control Bill looks like being finally accepted, there are two likely consequences: First, nothing at all. Next to zero effect on alcohol consumption, even with minors.

On a recent weekend at wonderful Koh Samet I saw the most popular bar on the island was heaving with young Thais, many of whom seemed barely 16 years old, let alone 18 or 20. And every table was freely consuming alcohol. Many were smoking, too, which just proves the action to hide cigarettes from view (but placing a large sign saying "Cigarettes Sold Here") is nonsensical and ineffective.

Second: I will miss important parts of the Formula 1 racing. This is because those annoying, red, "Intermission" screens will be back on True Visions. As usual, the technician who controls the screen will be confused over what is a real advert and what is a race with advertising banners around. Or he will nod off during a real alcohol ad and forget to press the button to cancel the red screen. Believe me, I have missed some classic overtake manoeuvres in the days when all UBC adverts were banned.

I applaud the initiative to tackle alcohol problems, but why do I predict these consequences? Because it's not the initiatives that are lacking (though I believe many are ill-conceived), it is the enforcement.



Fine and punishment

Let's put some perspective on the punitive aspects of Thai law. If found guilty of tax fraud, Khunying Potjaman may face a fine of 400,000 baht. The family can afford to pay 400,000 baht every day for the next 500 years, just from the proceeds of the Temasek deal, ignoring any other assets or income (plus the evaded 500+ million baht).

Where is the punitive nature of the fine? The 300-baht fine for a street vendor trying to earn a living on a Monday in Bangkok is a more onerous imposition.



Slower growth

It is my impression that consumption and economic growth have slowed at least in part because a lot of us are taking the ideas of the sufficiency economy a lot more seriously. For example, we are mostly buying what we need for our daily lives rather than buying things just to be buying things, as we often have done (and been encouraged to do) in the past.

While this may be discouraging to businessmen and to the Finance Ministry, I think this is healthy. It is very stressful for us to be in debt, so buying only what we need is an effective way to avoid this kind of stress. (Of course, there are many, many poor people who have no choice and live under constant stress.)

I hope that those of us who do have a choice will continue on this less materialistic path, and that the government and businessmen will come to accept the idea that there are more of us now who are trying to live more modest, happy and less stressful lives away from the shopping malls, instead of being just customers and taxpayers who should be spending x-number of baht each and every day in order to keep the economy going or else!



Death on camera

Re: "Patient dies as rescuers fight over who gets to treat him" (Bangkok Post, March 28). What a sad state we live in when things like this happen. It just goes to show that these people are more interested in themselves than they are for their supposed profession.

To prove my point, all you have to do is watch the news on Pattaya's cable channels. Every night you see at least one, and often more, scenes of a pickup in an accident with a motorcycle. The motorbike driver and/or pillion rider, lying on the street possibly bleeding to death, while the TV cameraman is taking shots of the rescue people kneeling beside the victim, pointing their fingers. As far as I am concerned, they are more interested in getting their picture on TV than they are at helping the poor victim.



Bangkok Post

Saturday March 31, 2007

No Rain, no gain

Kong Rithdee

The poster says ''Rain's Coming''. Rest easy, since it's not the tropical downpour that usually scares the living daylights out of a Bangkok governor, but Rain the Korean pop prince, the quick-stepping singer/dancer/actor who can elicit a scream more deranged than that of PAD hardcores. His February concerts in Bangkok were cancelled following the New Year's Eve bomb scare, but the sponsors clearly believe that young Thai groupies should receive equal opportunity in music education as other teenagers in Asian nations, and have confirmed that Rain's world tour will make a stop here in June.

Handpicked as one the most influential Asians by Time magazine last year, Rain's rise to global superstardom _ he's the hottest act across Asia who now plans a raid into the US market _ uncannily coincided with South Korean Ban Ki-moon's installation as the new United Nations chieftain.

As Ban dodges bombs in Iraq, Rain clads himself in a camouflage outfit and leaps across toxic puddles and above charred bunkers in the war-zone setting of his music video.

Is Rain's popularity boosting the image of Ban to the world? Or vice versa?

If Surakiart Sathirathai had upset the bookies and succeeded Mr Annan in New York, I imagine our buxom Tata Young might have sold a million more copies without having to resort to her half-naked MVs.

Perhaps the dual rise of Rain and Ban is not a coincidence; maybe it's a payoff from long years of strategic planning. The spectacular surge of Korean pop-cultural products _ music, TV series, movies, animation, on-line games _ is definitely not a fluke aided by aligning planets or Jatukam Ramadeva talisman, but a result of a painstaking cultural policy from successive governments that foresee how South Korea can export entertainment goods to the world the same way it exports Samsung and LG. We're talking about a country that, during the Roh Moo-hyun administration in 2003, appointed a film director, Lee Chang-dong, as the Minister of Culture and Tourism, and he played a part in popularising so many Lees and Parks and Kims and Ims and Moons to Southeast Asian audiences.

Even the US wouldn't dare make Martin Scorsese a Secretary of Cultural Affairs.

While our Siamese cultural bureau still ponders whether to hand down death sentences on college students in tight uniforms and TV smokers, the Koreans are busy with progressive thinking. Through agencies like Korea Culture & Content Agency (Kocca) and Korea Film Council (Kofic), the country invests a huge amount of won to foster an environment that ensures the nurturing and the discovery of talent, and in analysing marketing possibilities based on global showbiz trends.

Kocca owns recording studios and animation centres. Kofic, a government agency, has devised a complex financing structure that allows it to be able to invest in potentially hit movies and generate a decent cash flow.

South Korea brandishes the flag of cultural diversity in promoting its local entertainment sectors. Look closely and you'll sense a strong whiff of anti-globalisation: last year, Korean actors and directors announced their coalition with farmers in opposing the FTA between Korea and the US, which, if passed by Congress, would be the largest FTA for the United States since the North Atlantic Free Trade Agreement in 1994.

Still, the South Korean government, under pressure from Hollywood lobbyists for many years, has cut down screen quota _ the number of days required by law that theatres must show Korean films _ from 146 to 73 days.

Hollywood labels this screen quota an act of protectionism, but the South Koreans see it as a necessary defence against the domination of American movies, which is apparently the case in most countries.

Cut to home turf: the Thai Ministry of Culture _ at least its progressive wing _ of the previous administration did have an idea to form an agency that could be called Centre of Cultural Content, but as has happened with other policies, the coup put a stop to everything.

Our gifted Tata Young may continue to sing and sashay, but to dream of exporting our cultural products like South Korea, Thailand is stuck with a case of no Rain, no gain.

Kong Rithdee is a feature writer and film reviewer with real.time, Bangkok Post.

Bangkok Post

Saturday March 31, 2007