Cabinet to mull options on Elite Card

The ministry has grouped its proposals under two basic options. The first is to shut the firm down. The second is to keep it operating under one of three plans.

If the firm is kept going, the first option would be to seek a cash infusion by forming joint ventures with the private sector. The second option would be to go it alone with a revised business plan. The ministry warned, however, that there is no guarantee this option would see an improvement in performance.

The last option is to transfer the operation to the Tourism Authority of Thailand, which would create a new department for the purpose.

The proposals were submitted to the Cabinet last week, but ministers deferred the review until this week.

The company has 2,570 card members around the world. However, 795 members are not believed to have the proper qualifications. If this is proved to be the case, their memberships will be terminated, reducing the membership to 1,775.

TPC lost Bt1.4 billion between 2003 and 2008 due to overspending, attributed mostly to excessive salaries and internal operating costs, and the cost of offering members and management unlimited use of the plan's privileges. The loss has also been partly blamed on abuse of privileges by company executives.

According to the ministry, if the government closes TPC, it will be required to pay Bt2.2 billion in compensation to members and Bt101 million in debts, as well as compensate staff and cover other expenses. Total expenses are expected to amount to Bt1.7 billion if the 795 members are disqualified.

Some fear disqualification of the 795 members could have a detrimental impact on the economy, as the group includes a large number of potential investors. Disqualification would also likely prompt a lawsuit by members protesting the decision.

Keeping the firm going, on the other hand, would leave open the possibility of repairing any harm done to the country's image and securing the members' possible investments, according to the ministry. TPC would incur long-term debts, however.

TPC was established during the tenure of former prime minister Thaksin Shinawatra with registered capital of Bt1 billion.

During the first four years of its operation, TPC offered two types of lifetime membership: a Bt1-million plan for individual members and a Bt2-million option for corporate or business members. These fees were later increased to Bt1.5 million and Bt3 million, respectively.

The company has subsequently introduced four new types of membership: referral, family, guest and VIP.