Suthep: We're in control

Suthep Thaugsuban, the deputy premier in charge of security affairs, yesterday reassured fund managers there would be no military coup amid the increased political uncertainty ahead of the February 26 verdict in the Bt76-billion assets-seizure case.

Vorawan Tarapoom, president of the Association of Investment Management Companies, said after meeting with the deputy premier at Government House that she had complete confidence in the government's ability to handle the situation ahead of and after February 26.

The asset-management industry manages funds worth a combined Bt1.58 trillion, including equity, fixed-income, mixed and property funds.

"Before the session, I had some 20 questions for him. I'm satisfied with his explanation," said Vorawan, who is also managing director of BBL Asset Management.

Vorawan, who met Suthep along with top executives of 26 investment funds, said the government had sound intelligence on possible unrest scenarios related to the court verdict.

Second, its contingency plans to cope with any unrest are credible and all measures lawful. After finishing his presentation, there was a question-and-answer session in which Suthep asked fund managers if they were worried about the possibility of a coup.

Suthep quickly answered there would be no such incident.

Vorawan said BBL Asset Management had neither adjusted its portfolio nor reduced investments.

While there has been some redemption of unit trusts, the amount is rather small, totalling only 1 per cent of total asset value.

"In the worst-case scenario, we have arranged a large cash reserve to cover more redemptions by unit holders if there is a panic situation," said Vorawan.

Sukkawat Prasurtying, chief investment officer of Manulife Asset Management (Thailand), said the government's explanation would help foreigners understand the situation better. "I'm very pleased to hear about the clear-cut measures to handle the situation. If the deputy prime minister insists the government still enjoys a good relationship with the Army, then there'll no coup," he said.

Another fund manager from MFC Asset Management said he had confidence in the government's ability to handle the situation.

Meanwhile, Deputy Prime Minister Trairong Suwankhiri, who is responsible for economic affairs, said there should not be any overreaction.

Finance Minister Korn Chatikavanij said the government was fully prepared to cope with the situation. Korn also gave assurances there would be no coup and that there was no serious conflict among member parties of the coalition government, led by the Democrat Party.

Bank of Thailand (BOT) senior director Satorn Topothai said all commercial banks had their own contingency plans following the 1997 crisis, which were reviewed annually by the central bank. Part of the plans cover staff evacuation, while the computers will continue to run, thus ensuring smooth transactions.

BOT Assistant Governor Suchada Kirakul said contingency plans were in place to cope with the situation.

"For example, if commercial banks have a shortage of liquidity, they may use the reserve funds deposited with the central bank. We'll take care of liquidity in the financial system," she said.

Teeraphan Jittalarn, managing director of Siam City Asset Management, said the Securities and Exchange Commission had ordered all fund companies to report the liquidity conditions of all open-ended equity and fixed-income funds as of February 15 and February 28.

Lersuk Chuladesa, president and CEO of the Government Savings Bank, said all branches had been ordered to report to headquarters on any unusual development. Khan Prachuabmoh, president of the Government Housing Bank, said branches in some potential trouble areas, such as Rajdamnoen Avenue, had been instructed to close if violence broke out.

The government's newly established security follow-up committee convened its first meeting at Army headquarters yesterday.

It was agreed that any demonstrations by the red shirts ahead of the court verdict on the assets-seizure case would not lead to violence, because the red-shirt leaders had announced they would protest peacefully.

The red shirts often hold protests in small groups and therefore are unlikely to cause any violence, said Maj-General Ditthaporn Sasaamit, spokesman for the Internal Security Operations Command and who also acted as panel spokesman.