An academic seminar yesterday suggested that the Crown Property Bureau play a more assertive role as a model for others in promoting economic and industrial development growth, instead of focusing on passive investment.

The panellists cited as an example South Korea, where corporations such as Samsung play an instrumental role in dictating business policies to develop the country's economic health. The profile of Thai corporations with such potential, however, tends to be more low-key.

The CPB is equipped with assets and a longstanding history as the agency has evolved to meet business needs since its inception in 1890, said Porphant Ouyyanont, associate professor at the School of Econ-

omics, Sukhothai Thammathirat Open University. King Rama V set up the royal treasury office, a CPB predecessor, to manage the royal assets in order to create transparency in fiscal management.

The treasury office was the biggest landlord in Bangkok. For instance, in 1902, it owned 4,085 rai or 22.25 per cent of the capital's land area. It also played a role in modernising the economy.

Also in 1902, CPB's predecessor established Siam Commercial Bank, under a former name, and Siam Cement in 1913 by holding major stakes in these companies.

However, investment in recent years has tended to be more passive. At the seminar on "Structure and Dynamics of Capital During Post Crisis" at Chulalongkorn University, Kirkkiart Pipatseritham, a renowned economist, said the nature of the CPB's investment tended to be passive, like mutual funds. It does not focus on creating new industries.

His view was echoed by writer Vithayakorn Chiangkul, who commented that "the CPB plays a less active role that is not commensurate with the size of its business. The CPB can take a lead role to encourage others to follow in terms of efficiency and governance".

Supaporn Treesaen, head of the bureau's business promotion department, said it had in fact as invested in a number of industries which have contributed to the country's development. However, its role focuses on two areas at the moment: stock investment such as PTT shares, and property business.

In spite of its extensive property portfolio, the ratio of its income from dividends and the leasing of land is 80:20. Porphant said the portion of leasing income was unusually low largely because the CPB charges cheap rent for tenants in order to preserve some old communities.

Through the years, the bureau has shown its resilience after crises. For instance, in 1911 and 1912, Siam Commercial Bank was hit to the tune of Bt5.74 million from the bankruptcy of a bank.

The 1997 crisis also caused damage worth US$200 million (Bt7.6 billion) to the CPB. But the agency solved the problem by selling non-core businesses and adjusting its investments.

Siam Commercial Bank focused on universal banking while Siam Cement sold non-core businesses such as automobiles and metals and focused on its key businesses: petrochemicals, cement and paper. As a result, Siam Cement's group's net profit last year totalled Bt32.2 billion, a rise from Bt7.63 billion in 2001, while Siam Commercial Bank's net profit topped Bt18.88 billion, compared to a loss of Bt12.48 billion in 2002.

The CPB has also set up CPB Equity Co Ltd, which it wholly owns, to manage its equity investments, except for Siam Cement, Siam Commercial Bank and Deves Insurance.

It has also set up CPB Property Co Ltd to manage its property and real estate business.

Jeerawat Na Thalang

The Nation