Olarn Chaipravat and Vichit Surapongchai have resigned with immediate effect as directors of Thai Airways International Plc, following the airline labour union's accusation of conflicts of interest.

A source at THAI said their resignation letters were submitted yesterday evening, before today's plan by the union to stage a rally in front of the carrier's headquarters on Vibhavadi-Rangsit Road.

About 1,000 employees are expected to show up in black clothes.

Somsak Srinuan, the union chief, said that both directors should resign as they are not qualified to remain on the board of directors.

"The directors must not hold shares or be in the same industry as THAI, or in a company that competes against THAI, unless they notify the shareholders of that company. But Olarn and Vichit did not notify shareholders on their appointment date that they were directors of Shin Corp Plc, which is a shareholder of Thai AirAsia," Somsak said.

The union last week issued a statement calling for the resignation of Olarn. Their argument is that Olarn was a director of Shin, which was a major shareholder of Thai AirAsia.

As a director of THAI, he had access to business secrets which could benefit the low-cost carrier. Olarn is the chairman of Shin's audit committee.

Inspiring the union to make a move was the Supreme Administrative Court's verdict on March 23 that Olarn was a 'connected' person who could benefit from the privatisation of the Electricity Generating Authority of Thailand (Egat). Thus, the union argued, he was disqualified to sit on the committee that prepared for the privatisation.

This was one of the reasons the court used in nullifying the two decrees that supported Egat's transformation into a public company.

The union's statement did not include Vichit, but Somsak said yesterday that Vichit also fell into the same situation.

Vichit was appointed a director of Shin in February, after the telecom holding company went under a major shareholding restructuring. Then, Vichit was named one of the three new directors who represent the new shareholders led by Temasek Holdings, aside from Pong Sarasin and S Iswaran.

"Both of them are not qualified as THAI directors as that would pose conflicts of interest," Somsak said. "Aside from Thai AirAsia, their presence could involve other issues, including the future of the Bangkok International Airport at Don Muang."

Despite the resignation of Olarn and Vichit, the protest will go ahead as the union has been informed that other directors could also be in the same category, Somsak said.

The employees also want the board's answers on the progress of selecting a new THAI president, as well as the future of the airport at Don Muang.

The preliminary study shows that the airport would be used by low-cost airlines. Regionally, Thai AirAsia is the biggest low-cost carrier. 

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The Nation