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The richest king in the world faces transparency requirements in Thailand

The heir to the throne of Thailand’s third marriage has unfolded in grim headlines: The princess has been stripped of her titles, her parents and brothers have been jailed for vague allegations of corruption, and her uncle has been removed from his senior police post.

The heir to the throne then had to finalize a divorce agreement.

Fortunately for the prince, he had access to one of the world’s largest royal estates, a hidden holding company charged with stakes in Thai companies with blue chips and first-class land in the heart of Bangkok. The company covers the payment, according to reports, nearly $ 6 million.

Two years later, in 201

6, the prince ascended the throne. One of King Maha Vajiralongkorn’s first important actions was to transfer all possessions in the huge company known as the Crown Property Bureau to his personal ownership, giving him control over more wealth than the reported wealth of the Saudi king, the Sultan of Brunei and the British royal family. family taken together.

These assets – conservatively valued at $ 70 billion – are now the focus of a pro-democracy movement that is pushing for greater transparency in the monarchy’s finances and limitations on its broad powers.

In August, students at Thammasat University demanded that the king restore assets under the control of the Crown Property Bureau and put them under government supervision, a shocking act of disobedience in a country where strict royal insult law has traditionally silenced criticism of the monarchy.

Thai student protesters raise a three-finger salute.

Students raise a three-finger salute during a pro-democracy protest at Thammasat University near Bangkok in August. The salute was borrowed from the Hollywood movie The Hunger Games.

(Sakchai Lalit / Associated Press)

Some protesters also called for a boycott of the Siam commercial bank, in which the king holds a nearly 24% stake. Fears of deposits have prompted a director of the Central Bank of Thailand to reassure investors that there is enough liquidity in the country’s financial institutions.

“When protesters talk about the monarchy as an institution, the CPB is at the core,” said Pongkwan Savasdipakdi, a professor at Thammasat and a doctoral student in international relations at the USC. “One of the most important things people think about is how a monarchy can accumulate so much wealth, when we don’t really know anything about it.”

Questions about spending by a remote monarch living in Germany whose expensive lifestyle contrasts with his thrifty father arose when Thailand’s economy boomed with the COVID-19 pandemic, which followed years of rapid growth under military rule. a government closely linked to the ruling family.

Opposition politicians led by lawmaker Tanatorn Zhuangrungruangkit have also challenged an additional $ 1 billion in public funds earmarked for the monarchy in the 2020 budget – including security, travel, ceremonies and “special activities”, while the economy is expected to shrink by 8%.

Tens of thousands of peaceful demonstrators have gathered at rallies since the beginning of the summer, a remarkable political revival in a country that abolished the absolute monarchy in favor of a parliamentary system in 1932 but steadily distanced itself from democratic rule. The army, with royal support, overthrew a series of civilian governments and now controls parliament and almost every state institution.

The military, for its part, fell into disrepair when the king took over Crown’s property bureau, whose vast interests “fall into almost every important area of ​​Thailand’s economic life,” Porfant Uyanont, a late Thai academic who was a leading body in the bureau. report from 2015

Thai Prime Minister Prayut Chan-ocha, left, bows to King Vajiralongkorn.

Thai Prime Minister Prayut Chan-ocha worships King Maha Vajiralongkorn during the 2019 royal coronation.

(Thai Royal Household Bureau)

Established in 1936 to manage the crown’s institutional assets and cover part of its expenses, the bureau operates in a legal underworld – neither a government agency, nor a private institution, nor part of the palace – and in almost complete secrecy from inside the oil -yellow, Italian villa in the green royal district of Bangkok.

His board of directors, elected by the king, did not publish financial statements. Much of his possessions, especially on land, remain a mystery. But the calculated portfolio makes him the richest monarch in the world, a man who owns villas by the lake outside Munich and rents a hotel in the Bavarian Alps.

The bureau’s largest corporate investments – in Siam Commercial Bank and Siam Cement Group, an industrial conglomerate in which it owns a 34% stake – totaled about $ 8 billion at the end of last year, according to the companies’ annual reports. Although the bank’s shares lost half their value during the pandemic, dividends from the two publicly traded companies generated $ 342 million in revenue for the king in 2019.

Branch of the Siam Commercial Bank in the Chinatown in Bangkok.

A branch of the Siam Commercial Bank in Bangkok’s Chinatown was pictured in 2014.

(Apichart Weerawong / Associated Press)

His land holdings – including 5½ square miles distributed in high-rent areas in central Bangkok – were valued by Porphant at $ 32 billion in 2015, but little is rented out for commercial use.

The inspection of these assets was considered unnecessary for a long time, as the monarchy and its possessions “proved to be without financial burden for the country,” Porfant writes. The current ruler’s father, King Pumibol Adulyadej, who ruled for 70 years, was portrayed as so frugal that he never squandered a piece of toothpaste – even as Thailand became the economic engine of Southeast Asia and the crown’s investment multiplied in value. .

King Vajiralongkorn is a different figure.

Educated in a boarding school in Britain and a military academy in Australia, the 68-year-old monarch is married to his fourth wife and spends most of his time in Germany, often in the company of a friend known as the “royal wife” and a retinue. Even from this distance, he played a more prominent role in Thai politics, led two military units under his command, and changed the law to allow himself to reign from abroad.

King Maha Vajiralongkorn and Queen Sutida wave to the public

King Maha Vajiralongkorn and his wife Queen Sutida removed from the balcony of the Grand Palace in Bangkok during his coronation in May 2019.

(Wason Wanichakorn)

In July 2017, nine months after he ascended the throne, a law passed by the military-dominated parliament put the Crown Property Bureau’s assets “at His Majesty’s discretion”, ending a previous agreement that the monarch could spends the income of the bureau at will, but leaves the decisions for purchase and sale on the board of directors.

The king removed the finance minister and longtime director general of the bureau from the board and appointed his private secretary, a 69-year-old without financial or economic training, as chairman and several other loyal members.

“The monarch is supposed to be the main decision-maker now,” said Tom Felix Joenk, a writer and economist in Bangkok.

The assets are now taxable for the first time, but little has changed in terms of the portfolio. Vajiralongkorn retained corporate stakes and generally continued its conservative approach to land.

Bangkok skyline on the Chao Phraya River.

Along the Chao Phraya River, the silhouette of Bangkok is constantly evolving.

(Dake Kang / Associated Press)

The plots include some of the most sought-after neighborhoods in the capital, along the Chao Phraya River and in the Silom and Sukhumvit shopping districts. But Porphant found that 93% of the land generated little or no income, rented at “much lower than market prices” for poor municipalities, government agencies, schools, foundations and others with special ties to the crown.

The latter category includes the US government, which has been renting the ambassador’s residence for decades – a majestic mansion with blue shutters surrounded by lawns – for only “several hundred dollars” a month, Joenk said.

Critics say the non-transparent system allows the king to treat land deals as a political service, contrary to the protesters’ goal of a modern constitutional monarchy. In a 2011 interview with author Serhat Unaldi, former director of Chirayu Isarangkun na Ayuthaya, the bureau considered “social benefits … not just financial values” in the development of land for commercial use.

Still, the bureau is trying to extract more money from its land as the 1997 Asian financial crisis temporarily destroyed its revenues.

Newer tenants include the best shopping malls in Bangkok and luxury hotels. In 2017, he signed several adjacent plots to build the largest private construction in Thailand, a complex of hotels, apartments and a shopping center worth 3.6 billion dollars in a boxing stadium and night market.

In 2018, the much-loved Sofia Zoo suddenly announced that it was moving from its own crown land opposite the former royal residence to a new location in a northern suburb. Other properties in the area have also been taken over by the crown, fueling speculation that Vajiralongkorn may build the first new royal palace in Bangkok in more than a century.

“There is a lot of land being developed, but it is not clear to me that there is a change in the investment strategy,” Joenk said. “The development of the royal land for royal purposes [would be] but still. “

Those looking for answers from the bureau that did not respond to an interview request will be disappointed. It has not published an annual report since 2016. Parts of its website pull out blank pages; most of the English-language site is “under construction”.

“The status of the organization is clear now, whereas before it was less clear,” said Kevin Huyson, an honorary professor of Asian studies at the University of North Carolina at Chapel Hill. “She was in a legitimate underworld and is not now. This is the personal possession of the king. But there is much less information about this. “

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