Bureau of the Crown Property or
Crown Property Bureau () is a
Thai government agency responsible for managing the personal wealth of the
King of Thailand and his immediate family. The current monarch is
Bhumibol Adulyadej. According to Section 8 of the Royal Assets Structuring Act of 1936 (พระราชบัญญัติ จัดระเบียบทรัพย์สิน ฝ่ายพระมหากษัตริย์), the CPB is exempt from taxes. The CPB recorded over 5 billion
baht in earnings in 2004. The annual report of the CPB is submitted to King
Bhumibol alone. 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. Through the CPB, the monarch owns large 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, and the
Dusit Thani Hotel. The CPB 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 property includes the sites of the
Four Seasons Hotel Bangkok, the former
Suan Lum Night Bazaar,
Siam Paragon and
Central World Tower. The CPB spearheaded a plan to turn Bangkok’s historic Rajadamnoen Avenue into a shopping street to become the “
Champs-Élysées of Asia.” King Bhumibol's substantial income from the CPB, at least five billion
baht in 2004 alone, is exempt from taxes.
The current total market value of the CPB as per Forbes is approximately 36 Billion USD, which makes King Bhumibhol Adulyadej of Thailand the richest royal in the world.
Real estate investment policy
The CPB is the largest owner of real estate in
Bangkok. In 2007, the CPB turned away from small leases and instead invited large-scale property developers to build megaprojects. The change in policy surprised some residents but was welcomed by estate developers. 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
Suan Lum Night Bazaar
The Crown Property Bureau came under stiff criticism and resistance from the lease-holder at the Suan Lum Night Bazaar. Widely reported in the Thai language press, the operator of Suan Lum Night Bazaar vowed to take this case to the Supreme Court and lambasted the Crown Property Bureau for striking a new deal with
Central Pattana before negotiations with the current tenant.
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 result of the investigation were never reported.
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, cancelled 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.
See also
