Activists face PTT union suit

General News - Wednesday December 19, 2007

Activists face PTT union suit

Accused of contempt of court, libellous remarks

YUTHANA PRAIWAN & WORANUJ MANEERUNGSEE

The labour union of energy giant PTT Plc says it will charge consumer activists with defamation and contempt of court for statements made following the Supreme Administrative Court's ruling on its privatisation last Friday.

Natakorn Kaewdee, head of the PTT labour union, said yesterday that misleading statements by the activists "had caused public misunderstanding and damage to the country".

Mr Natakorn said the union would also file a complaint with the Securities and Exchange Commission against the activists over possible violations of securities laws.

Union vice-chairman Theerapong Krisdatheera said the activists' leader Rosana Tositrakul and other consumer rights activists had made false statements alleging conflicts of interest by Mr Natakorn, PTT president Prasert Bunsumpun and Energy Minister Piyasvasti Amranand in the privatisation of PTT.

"We have had enough. They have defamed us unfairly, and it is time to defend ourselves," he said.

Cabinet ministers yesterday approved the transfer of 15.1 billion baht worth of pipeline assets from PTT to the Finance Ministry to comply with the judgement.

PTT will also be forced to pay retroactive rent for the pipeline assets dating back to October 2001, the date when the firm was transformed from a state enterprise to a public company.

But activists decried the settlement as inadequate, and Ms Rosana said a new case against PTT would be filed.

"It's not over. [PTT] originally said assets of 100 billion baht were involved. Now it's 15 billion," she said yesterday.

"We are raising our concerns as Thai citizens. We are also stakeholders of the Thailand Corporation."

Ms Rosana said an independent committee should be set up to review PTT's 900-billion-baht asset portfolio to ascertain what was actually public property. PTT said the pipeline assets to be transferred to the state only included onshore pipelines on property taken by the company through expropriation when it was still the Petroleum Authority of Thailand.

The pipeline assets are used to feed natural gas from PTT to power plants run by the Electricity Generating Authority of Thailand and private firms.

But Ms Rosana said the logic did not make sense. "The offshore pipelines in the Gulf of Thailand are also located on public property, are they not?" she said. In its ruling, the Supreme Administrative Court said that PTT's privatisation and share listing in 2001 were lawful, but that pipeline assets on expropriated land had to be returned to the state.

Besides the assets transfer, PTT will pay 3.2 billion baht in taxes, penalty fees and retroactive rental payments for the pipeline assets. Pipeline rental fees over a 30-year period were estimated at 8.8 billion baht.

The costs fall far short of earlier estimates that up to 100 billion baht in assets could be taken off PTT's balance sheet. Analysts said the cost of complying with the judgement would have little impact on PTT, the largest firm on the Stock Exchange of Thailand with profits this year estimated at 100 billion baht and revenues of 1.4 trillion.

Shares of PTT, suspended since Friday, closed yesterday down 10 baht at 358 baht after resuming trade.

Mr Piyasvasti said the rental rate would be finalised within three weeks by the Treasury Department. PTT's rental estimate was based on a rate of 5% of gas revenues, minus expenses.

Mr Piyasvasti said that while the court had only singled out for transfer property gained from state expropriation power, he believed that the entire pipeline system should revert to state ownership.

"It would be worthwhile if doing so could stop [the activists] from filing more lawsuits," Mr Piyasvasti said.

Finance Minister Chalongphob Sussangkarn said the rental rates would be set at a rate fair to PTT, its shareholders and the public.

A high rental rate would add costs to PTT's operations and would potentially lead to higher gas and electricity prices. But a low rate would raise questions about whether the state was unfairly subsidising a public firm and investors.

For now, the settlement would not lead to higher electricity rates. Norkhun Sitthipong, a deputy permanent secretary of the Energy Ministry, said PTT had agreed to shoulder the added costs arising from the court judgement.

Bangkok Post