THE STORY of the Yingluck Shinawatra government’s rice-pledging scheme and its politics appears to be entering its final chapter with the Supreme Court due to deliver on August 25 its verdict on alleged wrongdoing committed by the former premier.
In hindsight, it was clear the previous government, deliberately or not, had created a big loophole while implementing the largest rice-pledging scheme in Thai history. The programme was widely popular among the 15 million farmers and their family members nationwide, as the government’s rice-pledging price of Bt15,000 per tonne was nearly double the then-prevailing market price.
This meant nearly 40 million tonnes of rice were offered by farmers and went into warehouses leased by the government. The huge inventory pressured the government to resort to government-to-government (G-to-G) export deals to lower the burden of holding on to excess stock – but those deals turned out to be bogus.
For example, the Thai government entered into four export deals with Guangdong Stationery and Sporting Goods Import and Export Corp (GSSG) and Hainan Grain and Oil Industrial Trading Co (Hainan). The first deal with GSSG covered two million tonnes of old rice worth Bt18 billion while the second deal covered two million tonnes of new rice worth Bt28.9 billion.
The third deal with GSSG covered another 2.3 million tonnes worth over Bt20 billion while the fourth deal with Hainan was worth Bt847 million.
After the government announced these G-to-G deals, opposition Democrat MP Warong Dejkitvikom questioned them, raising the issue in Parliament of whether they were fake, while the Yingluck government was implementing the rice-pledging scheme.
The Yingluck government stumbled after Warong discovered that there was no record of big rice shipments to China as announced. The deals signed with GSSG and Hainan were not valid because G-to-G rice exports are possible only via China’s COFCO Corporation.
Later, Warong submitted documents to the National Anti-Corruption Commission to substantiate his accusation that the Yingluck government had announced fake G-To-G deals. One piece of crucial evidence is that the bank account of the Department of Foreign Trade, which was supposed to show income from G-to-G export sales, had an inflow of funds originating in Thailand.
That was highly unusual, prompting the anti-graft agency to launch its investigation into complaints that some private firms had benefited from these bogus deals. Later it was found that, contrary to the government’s announcement, there had been no rice exports to China. Former commerce minister Boonsong Teriyapirom and 15 others were charged with faking G-to-G export deals.
Banking and financial documents show that the money paid for the bogus rice deals mainly came from those associated with rice trading firm Siam Indiga Co, including an aide of former Pheu Thai MP Rapeephun Pongruangrong, as well as Nimol Rakdee, an aide of Apichart Chansakulporn, founder of Siam Indiga.
Authorities later seized assets totalling Bt7 billion which belonged to Apichart, Siam Indiga and related persons. The firm’s founder is now serving a six-year jail term for embezzlement due to the loss of a government-owned rice shipment previously sold to Iran.
The investigation also alleged that former commerce minister Boonsong and others were had committed wrongdoing by facilitating the fake G-to-G deals to allow some private firms to get government-owned rice at a low price for re-export by Siam Indiga and other firms at a big profit. This resulted in financial damage of over Bt20 billion to the state. Boonsong and others will also face a Supreme Court verdict on these alleged wrongdoings on August 25. The government has also pursued a civil compensation lawsuit against them.
Siam Indiga Co’s Apichart, who is better known as Sia Pieng, started out in the rice trading business via another firm, President Agri-Trading Co, and later became the country’s biggest rice exporter during the tenure of former premier Thaksin Shinawatra, the elder brother of Yingluck.