EX-THAI CHIEF DENIES PART IN SCANDAL
>> Former Thai Airways International (THAI) president Kanok Abhiradee denied any involvement in the Rolls-Royce bribery scandal, according to the Thai media.
In a message sent via the Line app to his classmates at the Justice Ministry’s programme for senior executives on justice administration, Mr Kanok wrote that he worked with thousands of THAI staff to turn the debt-saddled company into the No.1 airline at the time.
In the message, Mr Kanok, who served as president between May 2, 2002, and April 30, 2006, insisted that he consistently adhered to the principle of good governance while working at the national carrier. He added that the bribery scandal has damaged the dignity and reputation of all THAI personnel.
“If this friend of yours acted like a bandit in this Rolls-Royce saga, punish this man with the maximum penalty under the law without hesitation,” read the message.
The message came after former Rak Thailand Party leader Chuvit Kamovisit told reporters at parliament on Friday that someone whose name starts with the first letter of the Thai alphabet is among those involved in the bribery scandal.
Government spokesman Sansern Kaewkamnerd said yesterday that Prime Minister Prayut Chan-o-cha has ordered an investigation into the alleged involvement of senior officials in the Rolls-Royce bribery scandal.
They said corruption leaves no receipts. The damning revelation by Britain’s Serious Fraud Office (SFO) regarding alleged bribery by engineering giant Rolls-Royce to “agents of the state of Thailand and employees of THAI Airways” to influence purchases of its engines is as good as one. The detailed investigation, the largest ever conducted by the SFO, should leave concerned authorities with no choice but to identify individuals allegedly involved in the corrupt practice. The national airline is compelled to review its procurement process and if necessary make changes to prevent such a disgrace from recurring.
The Rolls-Royce scandal should also prompt the government to review all acquisition and procurement processes of state agencies and enterprises. Those that still rely on agents should be terminated or reviewed whether it is necessary as the method apparently provides many loopholes for kickbacks.
The statement of facts prepared by the British court of Southwark for the case in which Rolls-Royce admitted to paying bribes to secure purchase orders in six countries including Thailand reads like a handbook on state-business corruption.
The document offers candid information including internal memos and emails discussing acceptable rates of commission and how its payment may be structured among other aspects of what seems to be a bribery business.
It makes for a depressing read for Thais, however. The statement describes three cases in which Rolls-Royce admitted to having resorted to bribery to secure purchase orders but the alleged corrupt network it unveiled seemed wide and ingrained, involving power players in society from a “senior military officer in the Royal Thai Air Force”, “a senior officer of THAI” and “political helpers” including government ministers.
What is worse, this is just one case that got caught. It does not take a lot of imagination to think about how many others have got away, how many hundreds of billions of baht have been siphoned off into individual pockets at the cost of the public interest.
Thai Airways asked for one month to investigate the alleged bribery concerning its three purchases of engine and maintenance procurement from 1991 to 2005. The company is obliged to bring into light all the facts it can unearth.
The Rolls-Royce scandal should also prompt the government to review all acquisition and procurement processes of state agencies and enterprises
The SFO’s finding is noteworthy in a few aspects. First, the document mentioned three purchases by THAI of Rolls-Royce T800 engines, and two individuals identified only as the “Regional Intermediary” and “Intermediary 3” were key players in all of them.
The report’s specific information about the two individuals and their behaviour should leave THAI with no difficulties to unveil the identity of those involved in the alleged act of corruption.
Second, while the bribery appeared to be consensual on both sides with RollsRoyce described in the court’s statement as arranging for money to be passed on by the intermediaries to “influence” the purchasing decision, several demands including for more money and quicker payment were made by the kickback recipients to the company as well.
It’s crucial for THAI to identify Intermediary 3 as the individual seems voracious. According to the statement, Rolls-Royce offered to pay a commission of US$1 million (35.4 million baht) for every aircraft ordered but Intermediary 3 demanded $1.33 million. Soon after Rolls-Royce agreed to the increased amount, Intermediary 3 demanded an additional sum of $1 million to be paid within seven days of THAI signing a contract to by the British company’s Trent engines.
These are on top of a “separate percentage commission” that Intermediary 3 stood to receive from Rolls-Royce to “maintain local enthusiasm for further business”.
The third point about the scandal is how it entailed such a large amount of money. For each of the three purchase orders, Rolls-Royce allegedly paid 663 million baht, 336 million baht and 254 million baht respectively in commission. These individuals, the intermediaries and their allegedly corrupt networks simply made personal gains on every corner at the expense of the national airline and eventually all taxpayers who support the state-owned company.
The court’s statement even mentioned a payment by Rolls-Royce of $500,000, again to the covetous Intermediary 3 in 1994, as an ex gratia even when a deal was not formalised.
Considering what is available so far, it’s likely THAI will find in its probe information that will be embarrassing, even damaging to its reputation. Still, the company, and the military regime that has made corruption a hallmark of its policy, has no choice but to get to the bottom of it.