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The king’s money: Thailand divided over the $40bn question

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For such a big change it was a very small announcement. An unscheduled communiqué published on its website on Saturday June 16 2018 revealed that Thailand’s Crown Property Bureau had transferred its entire portfolio — royal assets worth tens of billions of dollars held for more than 80 years on behalf of the monarchy and the nation — into the hands of the new King Maha Vajiralongkorn.

“All Crown Property assets are to be transferred and revert to the ownership of His Majesty so that they may be administered and managed at His Majesty’s discretion,” the CPB said, clarifying the details of a crown property law passed the previous year. It added that the assets would “now be held in the name of His Majesty” and be subject to tax.

It was an extraordinary move. Thailand’s royal wealth portfolio is estimated to be worth more than $40bn. In addition to swaths of prime real estate in downtown Bangkok, the CPB owns large stakes in the kingdom’s biggest industrial company, Siam Cement Group, and one of its largest lenders, Siam Commercial Bank. The transfer of ownership from the CPB to the personal control of the king confirmed him as one of the world’s richest monarchs. 

Strict restrictions on what can and can’t be said about Thailand’s royal family — most notably a lèse majesté law that carries a maximum 15-year jail term for saying or writing anything that might be construed as an insult — meant that the transfer of ownership was barely reported. Nobody, including the Financial Times, questioned why it was necessary or raised concerns about the concentration of financial power in Thailand’s current head of state. 

Bangkok: Thailand’s Crown Property Bureau announced in June that 'all Crown Property assets are to be transferred and revert to the ownership of His Majesty'
Bangkok: Thailand’s Crown Property Bureau announced in June 2018 that ‘all Crown Property assets are to be transferred and revert to the ownership of His Majesty’ © Anutr Tosirikul/Alamy

But two years later, amid a wave of nationwide protests, Thais are breaking their silence over the 68-year-old king’s wealth and the generous public budgets enjoyed by royal institutions. Student protesters are asking why public funds are being handed to a king who spends more time in Germany than he does in Thailand — an issue most Thai media avoid mentioning. A 10-point manifesto demanding reforms to the monarchy calls for a cut in the royal budget “in keeping with the country’s economic situation” — a nod to the coronavirus pandemic — as well as an end to royal charity projects, which receive taxpayer funds, and the separation of the king’s personal wealth from crown assets.

“It’s the biggest issue of all in Thailand,” says Parit “Penguin” Chiwarak, one of the most radical of the student protesters in pressing for royal reforms. “The royal institution can interfere in politics because they have enough money.

“If we don’t say it now, when are we going to say it?”

Emboldened critics

It is hard to overstate the impact of these criticisms in a country where the royal family was until recently viewed as untouchable. But precedents are being broken by an outspoken and, to many Thais, radical group of young leaders who are questioning the foundations of Thailand’s political order. In a provocative move in September they laid a plaque near the royal palace stating Thailand “belongs to the people, not the king as they deceived us”. 

Anon Nampa, a senior protest leader, calls the royal budget “excessive” and says it has been “unnecessarily increased”. The focus on the king’s wealth comes as Thai authorities, who have managed to restrict coronavirus at just over 3,600 reported cases, are now confronting the economic fallout, which has left millions unemployed and hurt an economy heavily reliant on tourism and exports. 

Parit 'Penguin' Chiwarak, a radical student protester, says: 'The royal institution can interfere in politics because they have enough money. If we don’t say it now, when are we going to say it?'
Parit ‘Penguin’ Chiwarak, a student protester, says: ‘The royal institution can interfere in politics because they have enough money. If we don’t say it now, when are we going to say it?’ © Lauren DeCicca/Getty

Thanathorn Juangroongruangkit, who led Future Forward before authorities dissolved the party in February, says royal wealth is 'taxpayers’ money, it has to be transparent. [But] these things are not transparent'
Thanathorn Juangroongruangkit, who led Future Forward before the party was dissolved, says royal wealth is ‘taxpayers’ money, it has to be transparent.’ © Mladen Antonov/AFP via Getty

At a rally on September 20, Mr Parit called for a boycott of Siam Commercial Bank, which he called “a money pot of feudalism”. “You are replenishing money for the German,” he said, using the name some anti-government Thais use for the king. “Close your SCB account, get all your money out, and burn your bank book.” 

Thailand’s central bank was quick to say the next day that it had noticed no surge in withdrawals from SCB. In a country without reliable opinion polling, it is impossible to gauge the level of support for the students’ call for scrutiny of royal money and finances, but it is safe to say that the monarchy and political status quo enjoy significant backing.

Many Thais, even those who oppose Prayuth Chan-ocha’s military-backed government, think the students have overplayed their hand with the calls to curb the monarchy’s powers, and that they are entering dangerous territory in a country with a history of coups and political bloodshed. 

Support for the protests will be tested on Wednesday, when the students plan their next big demonstration. They have spoken of marching to Government House to press for the resignation of the Prayuth government and “seizing” back the Democracy Monument in central Bangkok.

The students’ frankness has emboldened other Thais. MPs from Move Forward, formerly Future Forward, Thailand’s most outspoken opposition party, have been using their powers in parliament to probe spending on royal institutions. They point out that it has risen sharply since the king took the throne after his father King Bhumibol Adulyadej died in 2016.

Anon Nampa, a senior protest leader, calls the royal budget 'excessive' and says it has been 'unnecessarily increased'
Anon Nampa, a senior protest leader, calls the royal budget ‘excessive’ and says it has been ‘unnecessarily increased’ © Lauren DeCicca/Getty

Meanwhile, Heiko Maas, Germany’s foreign minister, last week raised the issue of the king’s residence in the country, reflecting growing discomfort in Berlin as protests escalate in Thailand. “We have made it clear that politics concerning Thailand should not be conducted from German soil,” Mr Maas said in response to an MP’s question in the Bundestag. “If there are guests in our country that conduct their state business from our soil, we would always want to act to counteract that.”

The royal bill

While the Thai king spends most of his time in Germany, he has taken firm steps to consolidate the power and wealth of royal institutions back in Bangkok since ascending to the throne. 

In 2017, the year the law on crown property assets was passed, the king combined the former royal household office with the privy council and a royal personal safety body to create a single Royal Office. Last year he issued a decree transferring two army regiments to the Royal Office, putting them under his direct control. 

Until this year, Thais — even opponents of the Prayuth government — avoided criticising the king’s role in Thailand’s status quo. But as near daily protests broke out across Thailand in August, Move Forward MPs used their seats on the budget committee of Thailand’s lower house to query royal spending. 

“It’s taxpayers’ money, it has to be transparent,” says Thanathorn Juangroongruangkit, who led Future Forward before authorities dissolved the party in February, but acts as an adviser to the committee. “These things are not transparent.”

According to Thailand’s budget, spending on the Royal Office is set to reach nearly 9bn baht ($290m) this year, more than double the Bt4.2bn budgeted in 2018, its first full year of operation.

Move Forward also questioned royal spending paid by other government departments, including Bt1.2bn from the defence ministry and Bt1.6bn from the Thai police for royal security, and Bt7bn budgeted for royal development projects, charitable endeavours that receive taxpayer money. The party also queried the Royal Office’s use of aircraft, and were given by Mr Prayuth’s office an inventory of 38 planes and helicopters reserved for royal use. 

The king’s corporate assets include a 33.6 per cent stake in Siam Cement Group, valued at $4.5bn
The king’s corporate assets include a 33.6 per cent stake in Siam Cement Group, valued at about $4.5bn © Dario Pignatelli/Bloomberg

Protesters have called for a boycott of Siam Commercial Bank, in which the king owns a 23.4 per cent stake worth $1.7bn
Protesters have called for a boycott of Siam Commercial Bank, in which the king owns a 23.4 per cent stake worth about $1.7bn © Brent Lewin/Bloomberg

Mr Thanathorn is also critical of the transfer of royal assets to the king, pointing out that he is now a leading corporate shareholder via the CPB’s stakes in SCG and SCB, and yet enjoys elevated legal status. “The king is now a player in the market,” he says. “It’s just wrong. It’s undemocratic.”

The CPB, akin to a sovereign wealth fund, had its origins in the Privy Purse Bureau, a body devoted to the upkeep of royal family members that began to invest in Siam’s economy as it was modernising more than a century ago. In the 1930s, after the uprising that made Thailand — as it was later renamed — a constitutional monarchy, the CPB was established, with a clear division between the king’s personal assets and royal ones. 

As Thailand’s economy was taking off in the 1980s, the fund became a leading investor in the stock exchange and industry. The CPB was chaired by the finance minister until 2018, when the king appointed as its head air chief marshal Satitpong Sukvimol, who now also chairs SCG.

“The demands by protesters to audit the king’s finances are unprecedented,” says Tamara Loos, a professor of history and south-east Asian studies at Cornell University. “But so is the way the king utilises what were formerly state funds.”

Royal finances

>$40bn

Estimate of the value of assets held by Thailand’s Crown Property Board

$37bn

2011 estimate of the property assets under the CPB’s control published in a book on the late King Bhumibol

$290m

Spending on the Royal Office this year, more than double the amount budgeted in 2018

38

Planes and helicopters reserved for royal use, MPs on the budget committee of Thailand’s lower house were told

Valuing the king’s wealth

Estimating the value of the king’s wealth is largely a matter of guesswork, as no full inventory of the monarchy’s assets is publicly available. The CPB last published an annual report in 2017 that included investment projects such as Langsuan Village (later renamed Sindhorn Village), a luxury real estate and retail development in Bangkok’s central business district, and the fund’s public works and charitable projects. 

Members of the Royal Thai Police stand under a portrait of King Maha Vajiralongkorn near the Grand Palace in Bangkok
Members of the Royal Thai Police stand under a portrait of King Maha Vajiralongkorn near the Grand Palace in Bangkok © Jewel samad/AFP via Getty

The king’s corporate assets are easier to value: he owns a 23.4 per cent stake in Siam Commercial Bank, worth $1.7bn, and 33.6 per cent of Siam Cement Group, valued at $4.5bn. However, the CPB’s biggest asset is real estate, mostly in Bangkok, but also in Thailand’s central plains and other regions.

A 2011 semi-official biography of the late king, King Bhumibol Adulyadej: a Life’s Work, whose authors were given access to CPB officials, estimated that the Bangkok real estate portfolio alone was worth about $33bn at the time, and added that a “high estimate” of the assets under the CPB’s control was about $37bn. At the time the bureau owned 3,230 acres in Bangkok and another 13,200 acres outside the capital, according to the book.

“If such wealth belonged to an individual, he or she would rank in the top six on the Forbes list of the world’s billionaires,” the book said. “But this wealth does not belong to an individual. It belongs to the crown.” 

Since the king took ownership of CPB assets, that has not been the case. Thailand’s property market has been buoyant in the decade since, although the pandemic has caused demand and prices to fall. Thailand’s government pushes back when journalists, including the FT, try to estimate royal wealth or refer to the billions of dollars of assets the king owns.

In 2012, when Forbes, which the previous year had declared Bhumibol as the world’s richest monarch, published a piece on “His Majesty’s balance sheet” and estimated the king’s fortune at more than $30bn, the Thai embassy in Washington criticised the magazine for including CPB assets “held in trust for the nation” into its calculation of his personal wealth.

Thailand’s foreign ministry declined to comment and a government spokesman did not respond to a request for comment. When the FT made reference to the king’s wealth in a recent story, the Thai embassy in London wrote to the newspaper saying: “The claim that His Majesty the King is in charge of billions of dollars of wealth is unfounded.” The letter noted the CPB was “managed by a board of directors” who worked towards “maintaining a balance between financial stability of the assets as well as generating social incomes to benefit all stakeholders”.

German media have reported extensively that King Maha Vajiralongkorn is renting a hotel in Garmisch-Partenkirchen in the Bavarian Alps
German media have reported that King Maha Vajiralongkorn is renting a hotel in Garmisch-Partenkirchen in the Bavarian Alps © Philipp Guelland/EPA-EFE

The German dilemma

Interest in King Vajiralongkorn’s residence in Germany — a staple for local media — has intensified recently as officials asked awkward questions not only about the king’s political role, but also the tax implications of his stay. According to local politicians, the monarch was living in a villa at Tutzing near Lake Starnberg, about 40km from Munich, at the time of his father’s death. More recently, German media have reported extensively that the king is renting a hotel in Garmisch-Partenkirchen in the Bavarian Alps.

In April two Green party MPs in Bavaria’s state legislature, Claudia Köhler and Tim Pargent, posed written questions to the state government as to whether the king might have been liable for inheritance tax. 

The Bavarian government, in its replies, cited German privacy protections surrounding tax and “the state interests of foreign affairs”. However, Mr Pargent says he established that the king would have been liable for inheritance tax. Diplomats are immune, but the Thai king is not a diplomat and his residence in Tutzing is not a consulate, according to the MP. 

“The issue is covered by tax secrecy,” Mr Pargent says. “I am not expecting a final answer through official channels. However, through our questions we were at least able to shine a bit of light on the matter.”

In Bangkok, Mr Thanathorn and MPs from his former party have exhausted their inquiries for the current budget round. But, they say they will take up the matter of royal spending again next year. 

One thing that is transparent, the opposition figure says, is the status of royal assets. “In 2018, they made it clear, without question, who the CPB belongs to.”

Additional reporting by Ryn Jirenuwat in Bangkok



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Analysis

Can plant-based milk beat conventional dairy?

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Plant-based milk brands are churning up the global dairy business, with a surge in sales, investment, and new products coming to market. The plant derived dairy trade is now worth an estimated $17bn worldwide.

Growing consumer demand has boosted investment. According to data firm Dealroom, venture capital funding across the plant-based dairy and egg sector has skyrocketed, from $64m in 2015 to $1.6bn in 2020.

The world’s biggest food company, Nestle, recently launched its first international plant-based dairy brand, a cow’s milk substitute made from yellow peas. Wonder will come in a variety of flavours, competing with established brands like Oatly oat-based milk. Founded in Sweden in the 1990s, that company is now valued at around $15bn. Demand for alternatives to soya, which once dominated the dairy free market, continues to escalate.

In the west, sales for other plant-based milks, including oat, cashew, coconut, hemp, and other seeds overtook soya back in 2014. Since then, they’ve raced ahead to be worth almost three times as much as soya products, with a combined projected value of more than $5bn in sales by 2022.

Advocates argue that plant-based production emits less greenhouse gas than cattle, making it the way forward to help feed the world and curb global warming. But dairy groups are fighting back with their own sustainability campaigns. And cow’s milk is hard to beat when it comes to naturally occurring nutrients, like protein, vitamins and minerals.

The average 100 millilitre glass of cow’s milk contains three grammes of protein, compared to 2.2 grammes in pea milk and just one gramme in oat-based substitutes.

Dairy producers have also won a legal bid, preventing vegan competitors in the EU from calling their products milk and yoghurt. Despite their growing popularity, plant-based brands are a long way from displacing conventional milk products. Their current $17bn turnover is still a drop in the pail, compared with the traditional cattle-based dairy trade, which is worth an estimated $650bn worldwide.



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'It’s more than sport – every day we are fighting for our rights to be equal’

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French pro basketball player and podcaster Diandra Tchatchouang on her role beyond the court



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Emily Dean on how allyship amplifies the female experience on film

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When I was six years old, I decided to be an artist. When I was 12, I decided to be a filmmaker. And instead of saying no, you can’t do that, or it’s not possible, my mum bought me a video camera.

After several years of working in the industry, I’m working with a female director for the first time. And it’s been such a gratifying experience. Women express leadership in different ways. Maybe you don’t have to be the loudest person in the room. But you can have great ideas.

And the best thing about being mentored by women and being a mentor to women is that make friends with women.

There’s something so powerful the women coming alongside other women, especially in a group setting. Because it means that you can and back each other up. You can support each other’s decisions, and you can amplify each other’s voices.

It’s about seeing yourself in your work. Seeing some part of yourself reflected is really gratifying. It’s also important that we speak up for female characters. I want to see girls and women on screen who have the whole cacophony of experience of what it’s like to be female.

I want to see their flaws. I want to feel their struggles. I want to see their joy. That is so important to making a character feel real. And it took me a little while to settle into myself and realise, if the characters I like to come up with are not your everyday run of the mill characters you see in animation, that’s fine. Because this is who I am.

When you walk into a story room, when you’re working on a film, you have to leave your ego at the door. I think that can be interpreted like keep your ego out of the work. But I’d also say for women who are maybe more shy that leaving your ego at the door means you walk in. And your job is to focus on what’s best for the story and for the film.

The story needs you. The film needs you, and it needs your best ideas. It won’t thrive unless you speak up.



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