New body to govern state firms

Superboard backs transparency move

The State Enterprises Policy Commission or superboard yesterday approved in principle the establishment of a holding firm to supervise state-owned companies in a move to prevent political interference and ensure management transparency.

The holding firm will function as a supervisory body to govern state-owned companies listed on the Stock Exchange of Thailand such as PTT Plc, TOT Plc, CAT Plc, MCOT Plc, Thai Airways International Plc (THAI) and Airports of Thailand Plc (AoT).

The State Enterprise Policy Office (Sepo), however, will be retained to supervise state enterprises that have been established by specific laws.

These include the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority and the Provincial Electricity Authority.

Thailand has 56 state enterprises. Some are financially ailing, while most have been criticised as vehicles used by politicians to enrich themselves and reward their cronies.

Strengthening state enterprises, shielding them from political influence and giving them a clear-cut role in the country’s development are among the priorities of the National Council for Peace and Order.

The superboard earlier instructed lossmaking state enterprises including THAI, the Islamic Bank of Thailand, the Small and Medium Enterprise Development Bank of Thailand and the State Railway of Thailand to rehabilitate their businesses.

It has also cut perks offered to board members and executives by some state enterprises.

These include THAI’s 15 international and 12 domestic free flights a year for board members.

Sepo director-general Kulit Sombatsiri said a working committee had been established to study in detail the law governing the establishment of the holding firm, state enterprises’ supervision, the process to screen board members, good governance, the evaluation process of the board and the authority and scope of the holding firm.

The new law will be enforced for both state-owned companies under the holding firm and state enterprises under Sepo’s supervision.

“The holding firm is nothing to be worried about for existing state enterprises, as the law will create better management and add more value to their shares since there will be professionals to manage their enterprises,” Mr Kulit said.

“Under the new law, state officials and politicians will be banned from sending their persons to sit as board members.”

In the long term, state enterprises under Sepo’s supervision will also later be moved to be under the holding company.

“Once this process is completed, we can say this will be a super holding company,” Mr Kulit said.

“We also expect the super holding company will function in the same way as Malaysia’s Khazanah Nasional Bhd and Singapore’s Temasek Holdings.”