Court saves petroleum giant from delisting

Court saves petroleum giant from delisting

Thailand's Supreme Administrative Court on Friday ruled that the 2001 privatization of PTT Plc had not violated Thai law, thus saving it from a potentially devastating stock delisting.

The court, however, ordered PTT to transfer the rights in expropriated areas and its 3,000 kilometres of gas transmission pipelines to the state.

Had the court ruled against the company, which accounts for some 20 per cent of the total capitalization on the Stock Exchange of Thailand (SET), it would have been forced to delist its shares on the local bourse, undermining faith in the market.

"This ruling will have a positive impact on PTT shares and for stock investors in the SET," said Adipong Pattarawikron, a stock analyst at Siam Commercial Securities.

According to the plaintiff, representatives of the Federation of Consumer Organizations, PTT's privatization had violated the law because executives had benefited from the process and the state enterprise had failed to transfer its gas transmission pipeline business, considered a state asset, back to the government as part of the privatization process.

The court ruled that although the privatization process had been conducted according to law, PTT had no right to transfer its assets to a privatized entity and would need to return its pipeline and land expropriated for the pipeline back to the state.

Adipong said the return of the pipeline, worth an estimated 3 billion dollars, would not have an immediate impact on PTT stocks if the payback was spaced out over an extended period of time.

Members of the Federation of Consumer Organizations succeeded in derailing a government attempt to privatize the Electricity Generating Authority of Thailand, the state enterprise that operates Thailand's national power grid, on March 23, 2006, on similar legal grounds that they filed against the PTT. (dpa)

Bangkok Post