But flowing into his bank account must have been more than that, since Suparut sits on the boards of 19 organisations.

Remarkably, among the 14 government officials listed recently by the Office of the Auditor-General (OAG) as government representatives on state enterprise boards, Suparut and Budget Bureau director Vudhibhandhu Vichairatna served the most - 19 state organisations each.

The huge income Suparut receives from these privatised state-owned enterprises (SOEs) begs the question of conflict of interest involving all state executives getting rich off of SOEs, following the case of MR Pridiyathorn Devakula, who has been brought under the media spotlight.

Auditor-General Jaruvan Maintaka's recent report criticising government executives who sit on more than three state-enterprise boards shows that it is time the government seriously addressed the conflict-of-interest issue.

Although the practice is not in itself a violation of the law, the report caught the attention of the public, who wondered if the officials would have enough time to do their regular work.

The OAG's call for the government to take action against the 14 state officials who sat on more than three state-enterprises boards suggests the situation is not proper, rather than mentioning anyone has done anything corrupt.

However, the focus on the issue was distracted by criticism that Jaruvan might have overreacted, especially in the case of Pridiyathorn, as all of his board memberships came ex officio with his post as governor of the Bank of Thailand.

Asides from the board of the central bank, Pridiyathorn also sat on the boards of the Foreign Exchange Fund, Securities and Exchange Commission, Thai Asset Management Corp, National Credit Bureau, and Financial Institutions Development Fund. These six organisations are where the former governor sat in accordance with the law and are concerned with the regulation of money flows, which supposedly has something to do with the central bank governor's job.

Pridiyathorn said the Council of State had resolved the issue of enterprise committee membership in 1975 and 1996. It ruled that officials could sit on these boards without violating regulations.

However, the issue of conflict of interest seems to be more apparent in view of the combined allowances some state executives received from sitting on SOE boards.

"I do not object to directors of big companies receiving compensation that reflects their contribution to the operation of the company. But sitting on 19 boards, and receiving this kind of compensation? Khun Jaruvan is right that the performance of the directors probably decreases drastically after the third board membership or so. In this regard, the minority shareholders are cheated by getting directors who do not perform to expectations," said an executive from a financial institution.

However, the issue is not how Suparut would enjoy this large windfall in annual allowances, but how the government would solve the conflicts of interest arising from state officials acting as directors for companies or privatised state enterprises in a wide range of industries.

The logic for having state officials sit on SOEs is to get things done more easily because they would be there when the board has to make an important decision. The nomination of these officials to state enterprise boards is understandable.

But these privatised state enterprises operate like a private enterprise and are often in a position where they are regulated by the government agencies under some of their directors.

In the case of Suparut, the Revenue Department reports to him and collects taxes from Krung Thai Bank, PTT and Thai Airways International as well as issues tax rulings that affect them. There is a conflict of interest that is very hard to resolve.

Prasarn Trairatvorakul, president of Kasikornbank, said yesterday that one executive should not be forced by law to sit on several boards as he or she would be too loaded down with work. He said most executives knew well how much work or how many positions they could handle.

A financier who asked not to be named may have the last word.

"It's normal to expect that the government sends in its people to the boards of directors of companies it controls. But when active government officials become board members of privatised SOEs, it raised the spectre of where their loyalty lies. Maybe it's time to rethink the whole system.

"The Finance Ministry must have representation on the boards since it's a major shareholder, but it should be done in a way that does not bring active government officers into the picture and compromise their loyalty," he said.

Jiwamol Kanoksilp

The Nation