PTT braces itself for legal action
Fears that emboldened civic groups may try to reverse previous agency listings
PTT Plc's top executives are seeking legal advice to prepare themselves for possible lawsuits from civic groups which have threatened to apply the Supreme Administrative Court's ruling on Egat Plc's initial public offering (IPO) to the privatised energy company, a source said.
"We don't know what they would attack PTT for, but the top executives have ordered officials to find out if the committees that were set up prior to the privatisation met the prescribed qualifications," he said, adding that the ruling on Egat should not be the same as on state enterprises, which were listed on the stock exchange.
PTT's share price dropped Bt2 yesterday to Bt240. Overall the SET index ended 1.13 per cent points higher at 730.85 on a trading volume of Bt11.91 billion as investors held off ahead of today's protest against Prime Minister Thaksin Shinawatra.
Campaigners said it would be the last big rally against the premier before a snap election on April 2.
Caretaker Finance Minister Thanong Bidaya yesterday said the economy would suffer significantly if Thursday's court ruling blocking the privatisation of state power producer Egat was used as a precedent to reverse the status of listed state-owned companies.
Thanong also said the Egat case represented a "technical problem" that could be fixed later.
"If [the campaigners] seek a court ruling with retroactive effect on listed state-owned companies, that would have serious economic repercussions," he said.
The Supreme Administrative Court nullified Egat's planned IPO, citing improper legality, conflict of interest, unlawful transfer of national assets to a public company and other issues in the privatisation process.
In the past five years the government has sold shares of some state-owned agencies, including oil and gas conglomerate PTT, which is Thailand's largest stock.
Rosana Tositrakul, who petitioned against Egat's privatisation, said after the ruling that she would pursue legal action against PTT's initial public offering in 2001.
The civic groups mentioned on Thursday that PTT could have failed to follow the procedures in the transfer to the public company of national assets it held while it was a state enterprise.
A source in the Energy Ministry said that in its transformation, PTT had been given expropriation rights as well as the right to construct natural-gas pipelines.
Earlier, the National Energy Policy Office proposed to have PTT relinquish its power over natural-gas pipelines, which it monopolised in the same way as the power lines owned by Egat, and have the pipelines overseen by an independent regulatory agency, but the proposal was shelved.
"If the civic groups proceed with this ownership issue, it will require a lengthy legal interpretation. We have to determine if PTT is considered an infrastructure agency and what we should do with the legal rights transferred," the source said.
Worse, if the court agreed the transfer was illegitimate and demanded the government revoke the privatisation, the government would be forced to delist PTT from the stock exchange.
Thanong said any compulsory buy-back of shares in listed state-owned companies would force the government to borrow heavily from foreign institutions.
"If the government has to buy back those companies' shares, the country will slip back into the situation before the 1997 economic crisis," Thanong said.
The government has several other privatisations on the go, including the partial sale of fixed-line telephone-operator TOT Plc, the Ports Authority of Thailand and the Provincial Electricity Authority.
Thanong said those plans remained intact.
"Egat represents a case that has its own technical problems, which don't apply to other cases," he said, "but we have to be more careful next time."
He denied accusations from critics and the People's Alliance for Democracy that he had any conflict of interest on baht flotation.
"The foreign-exchange issue is confidential. I told nobody about it, and I didn't get rich from being finance minister. I'm an intellectual, not a politician," he said.
He added that he was drafting a revision of the law to prevent finance ministers chairing the Securities and Exchange Commission's board of directors. The new law will say that the finance minister can appoint the SEC chairman or propose a chairman to the Cabinet.