PTT & Peterloo

[GWR]

Court ruling avoids delisting of Thailand's petroleum giant

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

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.

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

The same group 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. dpa

http://www.bangkokpost.com/topstories/topstories.php?id=124427

Supreme Court rules against delisting PTT Plc
The Supreme Administrative Court saved PTT Plc - the privatised gas and oil company - from a delisting on Friday when it rules against a petition from a consumer protection group.

The court however ordered PTT to transfer the rights in expropriated areas and gas transmission pipelines to the state.

Earlier most analysts also believed the possibility that PTT's stock could be taken off the big board was remote because damage to the economy and investor confidence would be extensive.

The court read out its findings, starting 10am amid deep anxiety from investors, who fear a de-listing verdict would not only hurt PTT stock but send the market into a tailspin.

Last year the Consumers Foundation and a group of five people petitioned the Supreme Administrative Court to revoke the Royal Decree Determining Powers, Rights and Benefits of PTT Plc of 2001, and the Royal Decree Determining the Time for Repealing the Laws Governing the Petroleum Authority of Thailand of 2001.
http://www.nationmultimedia.com/2007/12/14/headlines/headlines_30059095.php

[GWR]

PTT trading suspended until Tuesday
PTT Plc's share trading could be suspended until the Cabinet resolves on the asset split issue, Energy Minister Piyasvasti Amranand said on Friday.

The Cabinet will convene on Tuesday.

The stock was suspended since morning today, ahead of the Supreme Administrative Court's ruling on the royal decrees that backed up PTT's privatisation in 2001.

According to Piyasvasti, it remains to be discussed on the process in stripping public assets off PTT. The assets involve the natural gas pipelines and the rights over the land on which the pipelines are located.

The Securities and Exchange Commission today issued a statement, urging investors to wait for the clarification from PTT over the impacts of the ruling.

Though mutual fund investment is not suspended, the SEC also urged the unit holders to take into account the impacts on the unit trust net asset value. Nearly all mutual funds are invested in PTT, the country's largest stock in terms of market capitalisation.

- The Nation

http://www.nationmultimedia.com/2007/12/14/business/business_30059138.php

SET Index up on good news
The Stock Exchange of Thailand Index closed 0.40 per cent higher Friday, following the Supreme Administrative Court's ruling for PTT Plc to maintain its listing status.

The Index rose 3.31 points to 836.40 on turnover of Bt17 billion, while the blue-chip SET-50 index gained 2.54 points to 614.08.

Top five most active stocks are PTT Exploration and Production Plc, Banpu Plc, Siam Commercial Bank, IRPC Plc, and Aromatics (Thailand) Plc.

PTT is the country's largest listed company in terms of market capitalisation. The index was up though PTT was suspended and the suspension is likely to remain until Tuesday.

- The Nation

http://www.nationmultimedia.com/2007/12/14/business/business_30059141.php

[GWR]

Court rejects petition to de-list PTT

http://enews.mcot.net/upfile/1197619026.jpg
[Screengrab: MCOT]

BANGKOK, Dec 14 (TNA) – Thailand's Supreme Administrative Court on Friday ruled against a petition to de-list PTT Plc, the country's largest oil trader, from the Stock Exchange of Thailand, saying that two royal decrees supporting the stock listing of the company do not contradict the law.

However the court did not rule on the fact that PTT shares were offered at what the plaintiffs termed as unreasonably low prices, causing a massive financial loss to the state. The privitisation was conducted under the administration of former prime minister Thaksin Shinawatra.

Hearing the verdict, consumer activist Rosana Tositrakul, a co-plaintiff, said it was a significant victory forcing PTT to return control of the pipeline to the state.

However, Ms. Rosana and her colleagues said they will file a new lawsuit seeking to identify the offenders who are subject to both criminal and civil liabilities.

A source said the court read out its finding for over two hours before summarising s verdict on the complaint filed by a group of consumer activists challenging the legitimacy of the PTT privatisation and its listing on the Stock Exchange of Thailand (SET).

The court determined that the Royal Decree Determining Powers, Rights and Benefits of PTT Plc of 2001 and the Royal Decree Determining the Time for Repealing the Laws Governing the Petroleum Authority of Thailand of 2001 could not be revoked as demanded by the group because they were legitimately issued.

However, the court instructed the company to return the rights in expropriated areas and substantial natural gas pipeline assets to the Finance Ministry, although its listed status could be maintained.

"The pipelines are national property that should be returned to the public," Ms. Rosana said. "The court rejected our request for delisting the company, probably hoping to avoid negative impact on the national economy."

The pivotal PTT case had drawn much public attention, particularly investors in the stock market, since the court's decision could have an extensive negative impact on the economy and investor confidence if it turned out in favor of the consumer activists' petition.

Meanwhile, PTT executives are set to hold a press conference Friday afternoon on what the company will do following the court's ruling on the case. (TNA)-E111

http://enews.mcot.net/view.php?id=1788

[GWR]

Land lease included in PTT transfer package
Published on December 18, 2007

PTT Plc is expected to complete the transfer of three gas pipelines to the Finance Ministry within three months and pay lease fees backdated for five years under the Energy Ministry plan to be submitted to the Cabinet for approval today.

Energy Minister Piyasvasti Am-ranand said that once the Cabinet approves the plan, it is clear how PTT would be financially affected by the Supreme Administrative Court's ruling. Then, it would pave way for trading in PTT shares to resume after being suspended last Friday.

He said he would put PTT on the priority list of items to be discussed by the Cabinet today.

Meanwhile, the Administrative Court yesterday rejected a new petition by the Foundation for Consumers seeking a court order for PTT to prepare valuation reports on its assets.

The court argued that a cause for the case was not warranted as the Cabinet had not made any resolution on the matter, according to foundation member Rosana Tositrakul. The court suggested that a further petition could be filed when it became apparent that the Cabinet would not follow the court ruling delivered last week, she said.

Subject to be transferred to the Finance Ministry's Treasury Depart-ment are 32 rai of land on which three gas pipelines are located. The three pipelines are the Thai-Burma, Ratchaburi-Wang Noi, and Wang Noi-Bang Pakong pipelines.

A pipeline in the Gulf of Thailand and the pipeline linking the Joint Development Area (JDA) to Chana in the southern province of Songkhla will be excluded because they fall under the auspices of the Energy Business Act, Piyasvasti said.

The resolution was reached yesterday at the meeting between Piyasvasti, Finance Minister Chalongphob Sussangkarn, PTT president Prasert Bunsumpun, Stock Exchange of Thailand president Patareeya Benjapholchai and related agencies. They discussed the PTT assets and valuation assessments of the natural gas pipelines that are to be transferred to the state under the court's ruling.

Based on the decision to transfer only three pipelines, the value of the assets to be split from PTT is likely to be less than Bt100 billion, a source from PTT estimated.

The value would become clear after the Cabinet endorses the package. Then, investors can calculate the impact on PTT and trading of its shares can be allowed to resume.

In the proposal to the Cabinet, PTT will also pay a lease fee for the pipelines backdated to 2001, when the privatisation took place.

Chalongphob said that the Finance Ministry would evaluate the lease fee based on the interests of the shareholders and consumers as well as the standard rates applied by the Treasury Department for other privatised state enterprises like Airports of Thailand.

Piyasvasti said that to facilitate the transfer, the Energy Ministry has set up a working committee to finalise the procedures in line with the court ruling on Friday. The committee is chaired by Deputy Energy Permanent Secretary Norkhun Sitthipong.

He noted that the ministry would only ask the Cabinet for consent in principle. The transfer would require time for inspection of the land and the direction of the pipelines. The ministry would also need to take into account contracts PTT made with landowners. Representatives of the Office of the Auditor General, as well as other organisations, would participate in this process.

"I told the committee to pay what can be paid, such as the backdated lease fee though the fee was not included in the ruling. As a listed company, PTT needs shareholders' consent for whatever comes above the ruling. If a vote on this issue is necessary, the Finance Ministry and other related parties cannot cast their votes due to conflict of interest," Piyasvasti said.

Still, it should be remembered that though assets are transferred to the Finance Ministry, PTT must still bear liabilities incurred from the pipeline investment, he said.

PTT yesterday issued a statement saying it would strictly follow the court's order by releasing the pipelines and land before the establishment of the committee to supervise the energy business as per the Energy Business Act BE 2550. PTT, however, cannot act beyond the court's decision. The transfer of assets other than those stipulated by the ruling requires the approval of the shareholders.

PTT noted in its statement that the court ruled that it still had the right to utilise its current landholdings by paying returns to the state as required by the Finance Ministry. Nonetheless, the return rate should take into account the debts that PTT accumulated to construct the gas pipelines.

Watcharapong Thongrung
The Nation

http://www.nationmultimedia.com/2007/12/18/headlines/headlines_30059434.php

[GWR]

Your land is their land, my land is their land
Harrison George
21 December 2007
Alien Thoughts
The version of history that was narrated by my schoolbooks (as is still the case with Thai history schoolbooks) is a story of kings (and the odd queen), generals and other lofty personages of a kind I was never likely to know personally.

So I never got to learn in school about things like Peterloo, where, one summer morning in 1819, a crowd of people, who were like me, had gathered in Manchester to call for such radical ideas as universal suffrage (even if the universe in those days was strictly male only) and secret ballots.

But this was a time when the word ‘democracy' was a term of abuse. The powers of the day called in the local yeomanry, drawn from that part of society that did have the vote, and horses and swords. With enough drink inside them, they served as useful defenders of privilege. The rest, as they say, is history. (Though not in my schoolbooks, of course.)

The yeomanry charged, slashing at an unarmed and defenceless crowd that included women and children. When they'd finished, 11 were dead, 500 or so trampled and the government had the excuse to pass their equivalent of the Internal Security Bill to safeguard themselves against the mayhem that they had just provoked.

Now the detail of this incident that I want to draw to your attention today is the battle cry shouted by the yahoos of reaction on that fateful morning. As they bore down on the scattering crowd, they were yelling ‘For King, Church and Property'. (This was the right-wing response to the ‘Liberté, Egalité, Fraternité' that had come out of the French Revolution a generation or so earlier.)

And the idea of the sanctity of private property has ever since been a keystone of globalized capital. The World Bank routinely chastises governments that don't protect it with sufficient vigour, even when the concept of ‘property' has been stretched to include possession of some things that, on reflection, can't be owned, like information (aka intellectual property) or pollution (aka carbon trading).

So it is with some surprise that we see that the Thai government, normally a paragon of capitalist respectability, has been found guilty of flouting this basic foundation of modern capitalism.

You see, if you legally own something, then you can only be deprived of it under very special circumstances. And normally only by the state.

Suppose you own a piece of land that the government wants for a new road or something else of general public benefit. There is a legal mechanism by which the government can make you sell your land to them. All right and proper, with proper compensation.

But what if a privately-owned factory wants to build in your back yard? They can offer to buy, but they cannot legally force you to sell, like the government can. It's your private property. Sacred.

Now look what PTT did.

First they were owned by the government. So when they wanted to build a pipeline from the Burmese border to Pak Tho in Ratchaburi, to a power plant that had no generators to supply electricity that was no longer necesary after the 1997 economic collapse, they set about acquiring the private property they needed to achieve this. And public property too, since much of the route ran through National Parks and such. Never mind that clawing a trench through an RFD watershed is not exactly legal, even for the government.

Then the Thaksin government decides to make PTT a private company. So it sells off its assets, including the pipelines, to anyone with the connections to make a successful bid within the 67 seconds it took to get rid of the shares at the IPO.

Now this means that assets that PTT had been able to acquire only because it was a government entity had now passed into private ownership, which could not have acquired them in that way. By this two-step soft-shoe shimmy, the inviolability of property rights had been quietly finessed.

Now if I was the owner of a bit of scrub out in Kanchanaburi and I had been forced to take money from the government so they could bisect my land with a pipeline owned by the state, I can see myself feeling somewhat aggrieved. But when that pipeline is now earning money for shareholders who bought at 35 and are now looking at a share price 10 times that, I think I'd be incandescent.

So the courts put that matter to rights this week. They shirked the issue of members of the committee organizing the privatization standing to benefit personally from it; and the issue of nephews of ministers trousering more than their fair share of that 67 second fire-sale; and the issue of public hearings and all that messy democracy stuff.

But they did order PTT to hand back to government ownership the things only the government could have acquired.

But still the distinction of private and public seems to escape the PTT management, whose own salaries quadrupled as a result of privatization. Now that they are using pipelines re-owned by the government, they have to pay rent. The Ministry of Finance (which still owns half the PPT stock) proposed a standard rate of 5% of revenues that it charges other commercial clients. After they had recovered from their swoon, PTT argued they should only pay the 2.5% that, for example, the state-owned EGAT pays the Ministry.

But EGAT's privatization never happened. PTT's did and has just been confirmed by the court ruling. You would think PTT hasn't got a leg to stand on in arguing to be treated as if it were still a state enterprise.

Not quite.

If the Ministry insists on what to anyone else sees as a fair rent, says PTT, then we will be so financially straitened that we will be forced to pass our increased costs directly onto the consumer via higher prices. Don't dream of letting shareholders take a hit; forget about taking a long hard look at the enhanced wages and perks that PPT staff now enjoy. Just stuff the consumer.

Ah, the efficiency of the private sector.
http://www.prachatai.com/english/news.php?id=442