The chief of the Secu-rities and Exchange Commission (SEC) has firmly spoken out against a petition by activists to delist state-run mass-communication agency MCOT from the bourse, while economists urge caution in making such a decision for fear of dealing a serious blow to investor confidence.

"The delisting of state enterprises from the Stock Exchange of Thailand will have serious repercussions. It should not be done," Thirachai Phuvanatnaranubala, the SEC secretary-general, said yesterday during an interview on Channel 9, which is run by MCOT.

On Thursday, a group of three activists petitioned the Supreme Administrative Court to cancel the privatisation of MCOT, which has been listed on the stock exchange since 2004. The three are Veera Somkwamkid, secretary-general of the People's Network Against Corruption, and two anti-graft campaigners, Ratchanee Manmethee and Warit Chinsai.

They named deposed premier Thaksin Shinawatra, his Cabinet and the PM's Office as those responsible for the privatisation.

Thirachai said the listing of state enterprises had an upside as it eases the agencies' burden in mobilising funds. Besides, it also promotes transparency in the organisation.

Asked whether socially oriented state enterprises such as MCOT, which are not aimed at making profits, should become public companies, Thirachai said: "MCOT can operate for the social benefit and also make profits for the government, which owns shares in the state-run agency."

He said MCOT was unlike other state enterprises, which aim merely at social benefits and depend on government support forever.

Kongkiat Opaswongkarn, the managing director of Asset Plus and president of the Federation of Thai Capital Market Organisations, said the government should stipulate clearly the kinds of state enterprises to be privatised, and which are the ones that would retain government status.

"Otherwise, problems like this will arise," he said.

Kongkiat said if MCOT had to step back and become a full state-run agency, it would be adversely affected because there will be no transparency in its operation. "Moreover, the change of decision will affect the overall investment climate and foreign investors' confidence in Thailand," he added.

Kongkiat also hit out at the activists, saying, "The proposal to delist some companies from the SET naturally has a negative impact. If possible, I would like someone to counter-sue the people who cause such damage."

Thanachai Wongthongsri, acting vice president at MCOT's Legal Affairs and Secretary Office, said in a statement to the SET yesterday that the company believed the corporatisation process of the Mass Communication Organisation of Thailand had been conducted properly in accordance with the Corporatisation Act, and was transparent.

Thanachai said the three petitioners had not named MCOT as a respondent, and the respondents - Thaksin, his Cabinet, and the Office of the Prime Minister - have not yet received a copy of such a complaint.

MCOT will promptly examine all relevant information and have discussions with the authorities on how to proceed further, he said. MCOT will keep shareholders, investors and the SET informed on this matter.

Somchai Jitsuchon, research director of the Thailand Development Research Institute, said the demand for the delisting of MCOT would affect investor confidence, as reflected in MCOT's closing share price of Bt24.60 yesterday - down 4.47 per cent on the day and its lowest level in a year.

He said any delisting should be done with caution and follow a clear procedure. The process should prove the wrongdoings of the state agency which would necessitate a delisting. If this can be clearly proved, then the agency may be removed from the bourse.

"But on the other hand, if the delisting is a result of political conflict, then we will be caught in a vicious cycle," he said.

Somchai added that the privatisation of state enterprises should be clear at the government policy level. Privatisation is aimed at boosting efficiency and listing an agency on the stock exchange is only one of the options available. But eventually, it is up to the management of each state agency.

Somchai said MCOT's performance had been outstanding over the past three to four years because of professional management without political intervention. "But now that some senior military officers have been promoted back into state enterprises, I want to ask if we are going back to the old days."

In their writ to the court, the activists contend that as consumers of MCOT media services - considered public property - they have the right to dispute the privatisation.

They claim that Thaksin had a conflict of interest in authorising the privatisation because he was then the shareholder of Shin Corp, which had the controlling stake in iTV - MCOT's major competitor.

They argue that the privatisation is illegal because airwaves are public property that cannot be transferred from a state enterprise to a listed company.

They cite the Administrative Court's cancellation of the privatisation of the Electricity Generating Authority of Thailand as a precedent for the MCOT case.