State firms divesting spin-offs
Superboard scrutiny on non-core businesses
State enterprises have already pulled their investment out of 15 subsidiaries whose businesses are unrelated to that of the parent companies, in compliance with government policy, says the head of the State Enterprise Policy Office (Sepo).
Director-general Ekniti Nitithanprapas said 44 out of 158 such subsidiaries have been under the State Enterprises Policy Commission’s (superboard) scrutiny as their businesses had no connection to that of their parent firms. State enterprises have already withdrawn investment from 15 of the 44 firms.
A Sepo study has categorised these subsidiaries into five groups. The first category is profitable subsidiaries operating core or supporting businesses for the parents.
The second is loss-making subsidiaries operating core businesses for the parents. The third category operates noncore businesses for their parents but are profit-making ventures. The fourth group is loss-making subsidiaries operating noncore businesses for the parents. The last group covers those established for special purposes.
The superboard requires state enterprises to cut off and/or divest themselves from the third and fourth categories.
The commission has made efforts to restructure state enterprise investment to overhaul unproductive ventures or those being used for personal gain.
Mr Ekniti said that in future, state enterprises will be required to complete a checklist drawn up by Sepo when they want to incorporate subsidiaries to ensure that those businesses are established in accordance with the missions of the parent enterprises.
The establishment of subsidiaries will also be subject to the superboard’s approval, he said.
But listed state enterprises will not have to comply with those requirements, although they must report to Sepo, said Mr Ekniti.
Meanwhile, he said that the Finance Ministry is currently divesting itself of 20 companies in which it owns less than a 50% stake.
The ministry is set to sell off its interest in nearly 100 such companies.
One problem holding up that process is that the ministry needs an independent appraisal of the companies’ share prices, especially those that are not listed, said Mr Ekniti.
Currently, the Finance Ministry holds a stake in 73 non-listed firms with total par value of 3.59 billion baht, and 14 listed companies with par value of 11.6 billion.