The legal amendment would prohibit anyone from being on the board of directors of more than three state enterprises.

Existing laws already disallow this, but the Council of State has interpreted the law to mean that state executives can sit on more than three boards if membership of one or more of the boards came with their post.

The move to change the law came after the Office of the Auditor-General (OAG) last week named 14 senior officials who sit on boards of many state enterprises at the same time. The OAG asked Prime Minister Surayud Chulanont to improve management of the state enterprises by limiting the number of boards that senior officials could sit on.

Deputy Prime Minister and Finance Minister MR Pridiyathorn Devakula was named by the OAG as he has taken up positions on numerous boards since when he was governor of the central bank. The boards Pridiyathorn is on include those of the Financial Institutions Development Fund, the Securities and Exchange Commission, the Thai Asset Management Corporation and the National Credit Bureau. Pridiyathorn countered that he had been appointed by the rules of those agencies and could not resign from the posts.

Permanent secretary for finance Suparut Kawatkul was also on the OAG's list.

Sources have said that the State Enterprise Policy Office will propose creating a "director pool" from which people with good reputations may be selected and from which state enterprises can appoint at least a third of their board members.

Because of the above-mentioned loophole, senior officials can sit on the boards of many state enterprises despite not having adequate time to devote to the consequent responsibilities. The Thaksin government sought to amend state-enterprise laws but had not done so when the coup-makers seized power on September 19.

In another development, Pridiyathorn will propose fiscal-decentralisation solutions to the prime minister on Monday intended to enable the government to allocate funds to local governments as per usual.

Fiscal-decentralisation law requires the government to allocate 35 per cent of its revenue to local governments by the end of this year. However, the Finance Ministry has been unable to achieve this because the Education and Public Health ministries have not yet delegated part of their work to local governments.

By the end of this year it is estimated that only about 24 per cent of national government revenue will have been issued to local governments.

In suggesting changes to the funding regulations, officials have said that the level of financial subsidy issued by the central government should be in accordance with the scale of responsibilities undertaken by the local governments.

Wichit Chaitrong

The Nation