Bureau of the Crown Property

Infobox_Company
company_name = Bureau of the Crown Property
สำนักงานทรัพย์สินส่วนพระมหากษัตริย์
company_
company_type = Government agency
foundation =
key_people = Chirayu Isarangkul
location_city = Bangkok in Thailand
location_country = flag|Thailand
industry = Diversified Investments
Real Estate
Financial Services
Banking
Hospitality
num_employees =

Bureau of the Crown Property or Crown Property Bureau ( _th. สำนักงานทรัพย์สินส่วนพระมหากษัตริย์) is a Thai government agency responsible for managing the personal wealth of the King of Thailand and his immediate family. The current King is Bhumibol Adulyadej. According to Section 8 of the Royal Assets Structuring Act of 1936 (พระราชบัญญัติ จัดระเบียบทรัพย์สิน ฝ่ายพระมหากษัตริย์), the CPB is exempt from taxes. [ [http://www.crownproperty.or.th/history.php Short history from the Crown Property Bureau website] ] The CPB recorded over 5 billion baht in earnings in 2004. The annual report of the CPB is submitted to King Bhumibol alone.Asia Sentinel, [http://pages.citebite.com/b1u2r1x6o0eeg How Thailand’s Royals Manage to Own All the Good Stuff] , 2 March 2007] The CPB is headed by Chirayu Isarangkun Na Ayuthaya. CPB Property Co., Ltd. and CPB Equity Co., Ltd., both subsidiaries of the Bureau, are headed by Michael David Selby. During the late 1980s, the CPB had 600 employees, of which 90% were devoted to managing the Bureau's massive real estate holdings.Paisal Sricharatchanya, Far Eastern Economic Review, "The Jewels of the Crown", 30 Jun 1988, pages 60-63]

Management and overall portfolio

The CPB was established by the Constitution but is independent of the Thai Government. King Bhumibol takes an active role in the Bureau's management. Through the CPB, Bhumibol owns massive amounts of land and equity in many companies. The CPB's corporate shareholdings started in the 1970s. The CPB is the majority shareholder of Siam Cement (the largest Thai industrial and petrochemical conglomerates), Christiani & Nielsen (one of the largest construction firms), Deves Insurance (one of the largest insurers), Siam Commercial Bank (one of the largest banks), and Shin Corporation (a major telecommunications firm, through the CPB's holdings in Siam Commercial Bank). Other shareholdings include Honda Cars (Thailand), Y.K.K. Zipper (Thailand), Nanthawan (Obayashi), Thai Bridgestone, Minebea Electronics (Thailand), Bangkok Aviation Fuel Service, the Dusit Thani Hotel, the Siam Intercontinental Hotel. The CPB also held influential 2% "balancing stakes" in National Petrochemical Corporation and Thai Oil, the largest local refineries at the time. The balancing stakes ensured that no major partner could attain a majority vote without the support of the CPB. Many, but not all, of the companies, are listed in the Stock Exchange of Thailand.

The CPB also owns some 36,000 properties (approximately 13,300 acres (54 km²) in Bangkok and 40,000 acres (160 km²) in the provinces) which it rents or leases about to third parties. Bangkok properties include the sites of the Four Seasons Hotel Bangkok, the Suan Lum Night Bazaar, Siam Paragon and Central World Tower. The CPB spearheaded a plan to turn Bangkok’s historical Rajadamnoen Avenue into a shopping street known as the “Champs-Élysées of Asia.” Bhumibol's substantial income from the CPB, at least five billion baht in 2004 alone, is exempt from taxes. [According to Section 8 of the [http://www.crownproperty.or.th/history.php Royal Assets Structuring Act of 1936] (พระราชบัญญัติ จัดระเบียบทรัพย์สิน ฝ่ายพระมหากษัตริย์)]

The current total market value of the CPB is not known, however, estimates of the post-devaluation wealth of the royal household range from 2 billion to 8 billion USD (approx. 80 - 320 billion THB). [cite web | last = Horn | first = Robert | authorlink = | coauthors = | date = December 6, 1999 | url = http://www.time.com/time/asia/magazine/99/1206/thai3.moneyman.html | title = The Banker Who Saved A King | format = | work = | publisher = Time Asia | accessdate = 05 July | accessyear = 2006]

Real estate investment policy

The CPB is the largest owner of real estate in Bangkok. In 2007, the CPB turn away from from small lessees and instead invited large-scale property developers to build megaprojects. The change in policy surprised some residents but was welcomed by estate developers. [Bangkok Post, [http://bangkokpost.net/News/14Mar2007_news01.php CPB pushing city land development] , 14 March 2007] Historically, the bulk of Crown lands in Bangkok were leased to low and middle-income tenants at low rents. This led to many abuses, including the transfer of high-priced "right to lease" contracts and bribes paid to CPB officials.

Criticism

uan Lum Night Bazaar

Recently, the Crown Property Bureau has come under stiff criticism and resistance from the current lease-holder at the Suan Lum Night Bazaar. Widely reported in the Thai language press, the operator of Suan Lum Night Bazaar has vowed to take this case to the Supreme Court and has been lambasting the Crown Property Bureau for striking a new deal with Central Pattana before negotiations with the current tenant. [ฐานเศรษฐกิจ​, [http://www.thannews.th.com/detialNews.php?id=R3321471&issue=2198 ที่ดินร​.​ร​.​เตรียมทหารเดือด​! +'​ไพโรจน์​ ​ทุ่งทอง​' ​กร้าว​ไม่​ย้าย​ ​แถมนัดระดม​ผู้​ค้าต้านคาดโปรเจ็กต์หมื่นล้านสะดุดยาว] , 8 March 2007]

Controversy

Controversial deals

In 1996, the government investigated Siam TV & Commercial, a joint venture between the CPB and Siam Commercial Bank (of which the CPB is a major shareholder). Siam TV & Commercial won a 30 year concession to run a commercial television station, iTV, after offering only 120 billion baht in royalties. A rival company offered royalties of 625 billion baht. The results of the investigation were never reported.Asia Sentinel, [http://pages.citebite.com/b1i3a5c8t1wfa How Thailand’s Royals Manage to Own All the Good Stuff, part 2] , 2 March 2007]

Also in 1996, the CPB sought to acquire a 15% stake in recently rehabilitated First Bangkok City Bank from the Bank of Thailand for 8.50 baht a share, even though the market valued them at 22.50 baht a share. The deal was arranged by Finance Minister Surakiart Sathirathai, husband of Queen Sirikit's niece, (Mom Rajawongse Busba Kitiyakara's daughter). Surakiart's successor, who also served in the Thaksin Shinawatra government, canceled the order, saying “the fund stands to lose too much.”

Asian economic crisis and aftermath

CPB-owned companies were severely hurt by the Asian Economic Crisis of 1997. Siam Cement had not hedged its foreign debts, and suffered $1.2 billion in foreign exchange losses. Siam Commercial Bank was worse off, as loan collateral didn’t even cover half of the loans given out. By 1998, the CPB executed a major restructuring, cutting 143 billion baht worth of new projects. Despite that, its earnings dropped 80% in 1998.

The CPB received major injections from the public and private sector. The head of the CPB insisted that the government help bail out SCB, even though it was strictly a commercial enterprise. The government injected $1 billion into SCB, while agreeing to sell back its stake at a later date. Honda Motor recapitalized its struggling local unit partially owned by the CPB and offered to sell the stake back to the bureau at book value in 10 years. Future Thai Prime Minister Thaksin Shinawatra bought out SCB’s stake in iTV for $60 million.

References

External links

* [http://www.crownproperty.or.th/ Bureau of the Crown Property] - Official website
* [http://www.asiasentinel.com/index.php?option=com_content&task=view&id=402&Itemid=32 How Thailand’s Royals Manage to Own All the Good Stuff]