Archive for July, 2008

Tax evasion : Thaksin’s wife is guilty, and convicted… 3 years jail

The Criminal Court hands down a guilty verdict on the tax evasion case involving Khunyin Pojaman Shinawatra and two fellow defendants.

The court sentences Pojaman and her brother Bhanapot Damapong to serve three years in jail. Two years for the charges relating to the conspiracy to evade tax. One year for giving falsified statements.

At last ! At last a clear-cut, real justice decision against Thaksin’s clan.

Can you imagine… 11 years after the facts… (read here for details about the case).

I believe it’s impossible to say that this case was politically motivated… What was politically motivated were the 11 years to wait for… This case is not like the dissolution of TRT party.

This tax evasion case is totally different.

In this case, we had an important woman with her brother who just showed an amazing greed enhanced by an astonishing sense of impunity and contempt for rules.

It’s without any doubt a victory for the thai justice system.

But of course, the legal process continues.

They have the right to appeal within 30 days from now.

They are released on a five-million-baht bail per person. (Bangkok Post)

Inflation chronicles : +29 % for milk, +12,5 % for tollways

While the gvt entertain the (rich) thais and businesses with a tax cut on diesel and gasohol… for 6 months… the inflation tsunami continues, silently, to build up.

+29 % for raw milk

The Cabinet has given the green light for an increase of 4 baht in raw milk products in response to the request by dairy farmers nationwide.

Agriculture and Cooperatives Minister Somsak Prissananantakul reveals that the Cabinet has approved a price increase for unpasteurized milk products, previously sold at 14 baht per a kilogram, to 18 baht per a kilogram.

Earlier, a group of about 1,000 dairy farmers from provinces nationwide staged a protest that closed Pitsanulok Road in front of the Government House. They asked for a price increase in raw milk products. Somsak says the price increase for raw milk products could possibly lead to an increase in the price of milk cartons, of 2 baht per carton. (TOC)

+12,5 % for tollways

The Expressway and Rapid Transit Authority of Thailand’s board of directors on Thursday resolved to raise the tollway rate by Bt5-15.

Effective on September 1, the rates for 4-wheel vehicles would be Bt45 from Bt40, for 6-10-wheel to Bt79 from Bt60, and for vehicles with over 10 wheels to Bt100 from Bt85. (Nation)

But actually, it could be more… The government is thinking to add the… VAT (7 %). Yes ladies and gentlemen, tollways in Thailand are currently VAT free. Why ? Because. 😉

In august, we have prices increases in the pipe for : taxis and (a hot issue)… LPG (look the fuel consumption chart here to understand the issue).

Soft drinks should follow. And possibly, soy bean oil (read here, the pressure is mounting with fears of shortage).

11 years after… verdict thursday in Thaksin’s wife tax evasion case

Tomorrow thursday is a big day.

The Criminal Court is scheduled Thursday to hand down the verdict on the tax evasion case involving Khunying Pojaman Shinawatra, wife of former prime minister Thaksin.

Pojaman’s fellow defendants include her brother Bhanapot Damapong. The litigation centres on the transfer of Shin shares between the two which was declared as family gift in order to evade tax liabilities. (Nation)

But… we have to remember that the transaction happened in… 1997 ! Yes ladies and gentlemen…

Pojaman [Thaksin’s wife] transferred her Shin Corp shares held by her nominee Duangta Wongpakdi [who was the maid !!!] [in another article, Nation talks about “her private secretary Kanchanapa Honghern”] to Bhanapot [her brother and former president of Shin Corp] on November 7, 1997.

The shares were worth Bt738 million and Bhanapot failed to meet his tax liability amounting to Bt270 million.

The transaction came to the attention of the authorities in 2000, after the National Counter Corruption Commission (NCCC) uncovered evidence in connection with its investigation on assets declared by Thaksin upon assuming office.

The NCCC report prompted the Revenue Department to open a tax probe on pojaman and Bhanapot in 2001.

The probe, supervised by Sirote, focused on taking one-sided statements from the two without verifying the information nor examining circumstances and evidence surrounding the transaction.

Sirote’s hasty ruling to classify the transaction as a “family gift” and grant tax exemption for Bhanapot has deprived the state of revenue. (Nation)

And here is another version : “In November 1997, Pojaman transferred 4.5 million shares of Shinawatra Computer and Communication, worth Bt738 million, to Bhanapot through the account of her maid Duangta Wongpakdi. She presented the transfer as a share sale in the stock market, which is tax-exempt. This was a deliberate deception, the lawsuit claims.

In 2001, Bhanapot and Pojaman told officers of the Revenue Department the share transfer was not subjected to tax as it was “a gift” from Pojaman to Bhanapot. ” (Nation)

Nice huh ? ! You order a third party (your maid !) to give me 21 millions USD… and it’s tax free because I say -politely- to the Revenue Department “it’s a family gift“.

And the Revenue Departement says -politely- “but of course Khun ThaiCrisis. If you say so. Our pleasure“.


Bona fide gifts might be non taxable income. But in this case, apparently, Pojaman didn’t give “her” shares to her brother… But ask a third party (who was holding “her” shares) to give the shares to her brother…

Timeline : 1997, 2000, 2001, october 2007 (start of trial), july 2008 verdict.

The whole story is highly tasty. And it’s echoes… directly the asset concealment case against Thaksin himself (in 2001)… He was acquitted (judges voted 8 to 7), after his landslide victory at general elections.

So we can see that someway it’s a… tradition for the Thaksin’s family members to use… maid or secretary as nominees to hold shares (valued at dozen of millions USD) for them…

What a strange family. And what a strange country.

Anyway see you tomorrow… It’s going to be tasty.

Chart : retail prices of diesel and other fuels until july, and impact of the subsidy policy

Here is an update of my chart about the retail prices of fuels (from PTT, and for Bangkok, THB per liter).

Source PTT.

It was important to show july 25, when we had the tax cuts decided by the government (on diesel and gasohol, -2,30 THB per liter of diesel for instance).

This chart allows us to… calm down our enthusiasm. Why ?

-as you can see, for diesel and gasoline 91 (regular) we are back… to may 2008 levels. Great. If we compare with january 2006 levels, the increases of prices remain massive.

-then, we have to repeat that the 3 main fuels used for vehicles in Thailand are diesel and regular gasoline and LPG. Look at this chart (datas of may, source EPPO) (NGV is missing, but its volume remain small, eventhough it increases rapidly, “Currently, the number of NGV-installed vehicles in the country totals 93,000 units. The number of vehicles seeking NGV installation increases to 400 units per day from less than 100 units in 2006” source TNA).

-prices of LPG (for vehicles) will increase in… august.

-only a small number of people (with new cars) will enjoy the tax cuts on gasohol (91 and 95) and E20 (mixing of gasoline + 20 % of ethanol).

-distribution of E20 remains… virtual upcountry.

-and overall, we have to repeat that those tax cuts are for… 6 months.

So again, don’t believe that the “tax cuts party” since last week is going to change fundamentally the situation… from an economic point of view. The subsidy policy is just a quick fix of “feel good” dope.

The only thing that could change really the situation is a massive decrease of oil prices on the world market. Currently we are at 125 USD per barrel.

GDP and inflation : BOT revises down and up its forecasts

It’s good to be good ! 😉

I was right on GDP. And right on inflation.

-The Bank of Thailand (BOT) forecasted headline inflation would reach an 11-year high at 7.5-8.8 per cent, while core inflation would break the policy target to 2.8-3.8 per cent this year marking the first time since inflation targeting was introduced in 2000.

-The Kingdom’s economic growth forecast, however, was revised slightly lower to 4.8-5.8 per cent from 4.8-6 per cent. (Nation)

The last inflation revision was end of april… When the BOT increased its forecast from a surreal 4 % to 5 % for the whole year.

High inflation has apparently eroded consumption and investment while exports could grow higher than expected, thanks to global demand.

No it’s not “apparently” it’s “obvious“… Inflation (at least, the form we currently experience) leads to declining purchasing power.

The BOT estimated total consumption to grow 3-4 per cent this year, compared with a previous forecast of 4.5-5.5.

Total investment is projected to expand 4.3 – 5.3 per cent, lower than 8.5-9.5 per cent in earlier projection.

Still those projections could be lowered again. I mean it’s a sign that the total investment projection has been divided by 2 ! The previous ones were delirious, designed for a rozy world full of confidence, mega-projects, and small kids laughing in Wonderland etc.

The reality for businesses is totally different : uncertainty (on the political front and the economy as well), higher interest rates, running inflation/costs, high competition (difficult sometimes to increase prices, or even forbidden due to gvt prices controls policy), and bad perspectives for exports (obvious slowdown in US and UE, again the BOT is dreaming when talking about a continuous higher global demand !), etc.

Press : “Asian Nixonomics may spell subsidy-driven stagflation”

A very good article about the current policies, and their risks, shared by most Asian countries.

Thailand follows with diligence the text book : postpone the pain, increase the subsidies on very short term, etc… It’s Wonderland. And soon after, it will be Horrorland.

July 28 (Bloomberg) — Asian governments from India to Malaysia, clinging to budget-busting fuel subsidies, may end up paying an even higher price: saddling their economies with an extended period of stagflation.

“Subsidies will come increasingly in the way of future growth,” says Kalpana Kochhar, a senior adviser for the International Monetary Fund’s Asia-Pacific Department in Washington. “Not passing prices through and keeping artificial price and wage controls never works.”

Governments are being forced to choose between two unattractive alternatives: run up bigger deficits by continuing to shield citizens from soaring energy prices, or start to withdraw subsidies, fueling inflation and political backlash. Inflation has already reached decade highs throughout the continent and played a role in destabilizing politics.

Exclusive (joke) : Obama is General Prem’s reincarnation

First, have a look at the latest hilarious pastiche from NotTheNation, about Obama.

Some quotes :

Obama calls on Berlin to “together hope new free hope united”

Obama delivered a stirring call for greater cooperation between the United States and Europe in facing what he called “challenges tomorrow stand up can face.”

In a clear repudiation of words without uplifting value, Obama said, “Ideals aspirations free, dream humanity one.”

“Tear down walls, we are all Berliners, we are all one, united wall of hope,” Obama said, echoing memorable lines from historic speeches delivered in this city by presidents John F. Kennedy and Ronald Reagan.

“One nation one world love me one people.”

“Christian Muslim Jew everyone together party pin tail donkey my place 5pm,”

[ NotTheNation, you’re the man ! ]

Then consider this -real and overwhelming- statement from General Prem, member of the Privy Council.

“Definitely, I don’t want to see the society divided,” Prem when reporters asked if he worried about social divisiveness.

But he believed that when the situation warranted, all Thais would be united.

“I believe when it’s time, all Thais will come together,” Prem said. (Nation)

We could find a serious teaching to this joke : when politicians don’t know exactly what to say, they stick to some keywords and obvious marketing concepts : future/past, forward/backward, unity is better than divisiveness, full is better than empty, etc. 😉

To be fair, we should note that this rozy rethoric is a real national sport here in Thailand, and not an exclusivity of… General Prem.

Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.