Published on June 27, 2005

Given the PM’s normally fast reaction to false news, The Nation was surprised at his silence when a report came out about him being likely to talk with CITIC Group on the future of Thai Petrochemical Industry.

We reported that during his visit to China to commemorate 30 years of diplomatic relations, PM Thaksin Shinawatra would seek a meeting with the Chinese giant to dissuade it from joining hands with TPI founder Prachai Leophairatana to buy TPI’s debts.

Thaksin’s silence was confirmation of the future meeting as well as the government’s unusual interest in shepherding the protracted debt-restructuring of TPI.

A few years ago, TPI’s original planner was ousted and replaced by one nominated by the Finance Ministry. It came to light that a sale of a sizeable stake in TPI to PTT Plc and other government units was in the works.

And just when PTT agreed to conduct due diligence on TPI, Hong Kong-listed CITIC Resources Holdings Ltd emerged as Prachai’s conspirator. What’s amazing is that while PTT was granted full access to TPI’s books, the plan administrator claimed it had no authority to reveal confidential information to any investor, including Prachai and his allies.

CITIC had to petition the Central Bankruptcy Court, which is scheduled to rule today.

It would dismay the government if the court opens the way for CITIC, as that would mean PTT might need to wait until CITIC can put together its own offer. But in a free market, the rewards should go to the highest bidder.

While creditors generally welcome CITIC’s move, government excitement over the group’s presence is nothing but odd.

Rumours suggest that while accompanying Thaksin to Beijing next week, Finance Minister Somkid Jatusripitak will also seek a meeting with CITIC.

Why does the government pay so much attention to TPI? The only answer we can think of is that TPI is the country’s biggest debtor and its rehab has taken too long. Probably, it believes a deal would restore foreign creditors’ confidence. But then, what’s the difference if CITIC becomes the rescuer or PTT does?

achara_d@nationgroup.com

Post your comment to this story here