The Finance Ministry is expected to propose the draft bill to the Cabinet possibly next week after comments are collected from other ministries, he said.

If the National Legislative Assembly passes the bill, it would replace the Corporatisation Act, blamed for having many loopholes.

To patch up the current privatisation law's defects, the new version does not allow the government to privatise state enterprises that enjoy a monopoly or other privileges granted by law.

The draft also prohibits state enterprises from establishing subsidiaries to run such businesses.

It treats subsidiaries as part of the privatisation process, which entails certain conditions.

Subsidiaries were included after critics alleged the first draft left a gap that state enterprises could exploit to set up a subsidiary to circumvent the privatisation law and siphon off state assets.

For example, the Electricity Generating Authority of Thailand (Egat) has recently formed Egat International to oversee its foreign ventures. Egat is widely expected to

list the unit on the stock exchange.

However, if a state enterprise sets up a joint venture with a company, that joint venture is subject to the Public-Private Joint Venture Act.

The draft also makes clear that an independent regulator is required in the event of any change in status of a state enterprise.

Initial public offerings will emphasise the allocation of shares to retail investors rather than the attainment of the best price, as suggested by Democrat Party executive Korn Chatikavanij, said Somkiat.

Wichit Chaitrong

 The Nation