The rulings on Olarn formed part of the court's judgements nullifying the change of legal status of the agency into Egat Plc.

Olarn, an economic adviser to the prime minister, is a member of a three-person committee appointed by Somkid Jatusripitak, then finance minister, to look after preparations for Egat's change of legal status from a state enterprise to a public company. This "corporatisation process" was necessary before Egat could float its shares to the public as part of its privatisation programme.

The Thaksin government has already succeeded in transforming the agency into Egat Public Company Limited, which has floated shares to its executives and employees. A day before Egat was to be allowed to trade in the secondary stock market in November last year, the Supreme Administrative Court agreed to take a case filed by a group of consumer activists who alleged that the corporatisation process was illegal.

In its landmark ruling yesterday nullifying the privatisation of Egat, the court questioned Olarn's qualifications for the assignment of looking after Egat's corporatisation. Olarn, the court said, is a director of Shin Corp, which is a major shareholder of Advanced Info Service (AIS), the country's largest mobile-phone operator, which would stand to have a vested interest in the business of Egat.

Egat Plc has set up Egat Telecom Plc to undertake the telecommunications business under Egat's huge fibre optic network covering the entire country. AIS is reportedly interested in Egat's fibre optic network, which would help to expand its telecom business.

The court ruled that Shin Corp, with Olarn as its director, would have a vested interest in both Egat and Egat Telecom.

Moreover, the court pointed out that Olarn is also a director of PTT Plc, which has a vested interest in Egat, which purchases natural gas from PTT.

"Olarn is not qualified to join a committee of qualified persons looking after the preparations for the setting up of Egat Plc" because he could not maintain a neutral position, the court said.

It also said the appointment of Olarn to serve on the committee was illegal, in violation of Article 19 of the Administrative Practices Act of BE 2539.

The court added that the outcome of any decision by the committee of qualified persons in regard to its oversight of the change in Egat's legal status would be illegal.

Olarn, a former central banker and CEO of Siam Commercial Bank, is also an economic adviser to the Finance Ministry. He has the ear of Prime Minister Thaksin Shinawatra and Somkid, who is now deputy prime minister and commerce minister, with his macroeconomic forecasts. He has devised an early economic warning system to help the Thaksin government monitor economic risks. Olarn also serves as chairman of the council of Shinawatra University.