Firms benefit from 'leak'

By The Nation
DATE : 04/07/1997 02:01:56

DEMOCRAT MP Suthep Thaugsuban claimed yesterday that three major companies with political connections had been aware of the baht floatation before the drastic measure was announced on Wednesday, and they greatly benefited from the inside information.

The allegation was just a highlight of the fierce opposition MP attacks on the baht decision, which they insisted was a desperate, ill-prepared measure prompted by the lack of funds to further defend the national currency against foreign speculative attacks.

Suthep and Democrat economic veteran Supachai Panitchpakdi said they were sure "champagne corks are popping" among those gaining from the plunge of the baht.

"At least three business giants became great survivors," said Suthep, who declined to name them. "I wonder whether they have connections with the government."

The opposition MPs said that when the Prem government devalued the baht in the '80s, there were no rumours about anyone having benefited.

"This time rumours buzz, and people are seriously questioning the integrity of Gen Chavalit Yongchaiyudh," Suthep said.
The Democrats said the most "damning evidence" that the baht floatation was a result of desperation rather than economic shrewdness or political bravery was the huge amount of money that was used to defend the currency recently and the looming depletion of international reserves.

"Could we have saved the Bt150 billion used to stave off speculators?

" Suthep asked. He added that apart from the huge amount used in the campaign to protect the baht, the Chavalit government had wasted Bt350 billion more in a bid to rescue troubled financial institutions.

"Chavalit has been prime minister for six months and he wiped out Bt500 billion. What if he remains two more years?" Suthep said.

The Democrats criticised the government for the "poor timing" of the baht floatation and for not spelling out clear-cut measures to cope with the gigantic consequences.

Chavalit and new Finance Minister Thanong Bidaya listened pensively as Suthep compared the government to an "army commander who led his troops to seize a hill [when the baht was defended in May], but who then ran away from it with his rifle pointed toward his own soldiers."

Democrat MP Surin Pitsuwan asked if the government, with its sudden floatation policy, had effectively "betrayed" regional banks which had helped Thailand defend the baht.

"Will we be left alone in the future?" said the Nakhon Si Thammarat MP.

Bangkok Democrat MP Preecha Suwannathat questioned the legality of the government's move, which he said was based on a nullified 1958 piece of legislation.

Suthep also claimed that a well-known Swiss analyst, whom he refused to identify, had painted a gloomy picture of Thailand's post-floatation future. He said the analyst believed that with fundamental problems remaining unsolved, draining reserves and the two-tier foreign exchange system continuing as is, it would "threaten to drive the country into bankruptcy unless the government quickly obtains strong funding support from abroad".

Government adviser Surasak Nananukul also came under attack for suggesting in a letter to the prime minister that a cement company and a construction firm would go bust because of the devalued baht.