Vol. VI No. 24 - Tuesday
August 7, - August 13, 2007

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Updated every Tuesday
by Saichon Paewsoongnern

HEADLINES [click on headline to view story]:

Strong baht leads to factory closures

DSI extends Thaksin hearing deadline yet again


Strong baht leads to factory closures

Business closures of companies due to heavy losses rising from the baht surge have begun to have a domino effect on Stock Exchange of Thailand listed companies as Union Footwear plans to de-list its stocks and close business permanently by the end of this year.

A Thai investor looks on as shares are traded at a private company in Bangkok last week. AP Photo/Sakchai Lalit

Songsak Thammapimukwattana, president of Union Footwear Plc, notified the SET of the company’s board resolution to de-list its shares from the market because the firm is set to cease business operations due to suffering heavy losses from the sharp baht appreciation.
He said the company had experienced accumulated losses for three years thanks to stiff competition in the footwear business and higher costs of production.
The firm had run business mostly in the US dollar denomination. The currency exchange volatility and the swift baht surge since last year had adversely affected its competitiveness.
The company viewed the footwear business had high risks of losses under the current circumstances and so decided to cease its production.
It would be responsible for the monthly wage payment and severance pay for all 3,000 company workers, he said.
Santi Vilassakdanont, chairman of the Federation of Thai Industries, said the baht had begun to weaken and hover at 33.80 to the US dollar following the issuance of various measures to curb its volatility. He added that the private sector was satisfied, for the time being, with the current level of the baht.
However, he conceded it is hard to see the baht further weaken because foreign capital continues to flow into the stock market in large amounts.
Mr. Santi said the private sector would take one or two months to assess the situation before deciding whether other measures should be issued to rein in the baht fluctuation.
The Bank of Thailand Governor Tarisa Watanagase said the central bank could not allow payment of cargos in US dollar terms as sought by the private sector to ease pressure of the baht surge.
Such an action is tantamount to Thailand’s permission for the settlement of cargo trading in foreign currencies in addition to the baht. At present, the check clearing system has been run in baht terms only. TNA

DSI extends Thaksin hearing deadline yet again

Thailand’s Department of Special Investigation (DSI) extended the deadline for the last time for ousted Prime Minister Thaksin Shinawatra, his wife Pojaman and three other defendants who were senior executives of SC Asset Corp. to report for a hearing on August 17, according to the DSI chief.
DSI director-general Sunai Manomai-udom said arrest warrants would be issued for those who fail to report to the DSI on that date at 1.30 pm.
The tough decision was made following a three-hour meeting by DSI officials as all the accused persons, except Mr. Thaksin who is now living in self-imposed exile in England, had requested postponements through their lawyers in the past.
Mr. Sunai said investigation officers had now acquired sufficient evidence against Mr. Thaksin on the assets concealment charges, and that there was no need to request for extradition from British officials.
The Wednesday meeting also dealt with Mr. Thaksin’s statement that he was prepared to return to Thailand, but only after the general election scheduled to be held in November or December, for fear that his personal safety could not be assured, but Mr. Sunai said the reason was unjustifiable as the government had pledged to guarantee his safety in Thailand.
Regarding the case of Mrs. Pojaman, who had sought postponement to report until August 27 by citing her illness, Mr. Sunai said DSI officials believed the duration of the postponement was too long and, furthermore, they also learned that she had already recovered.
Those who report on August 17 will be allowed bail, he said. Bail will not be allowed for those who fail to appear then, as arrest warrants will be issued immediately.
The DSI chief had said earlier that Mr. Thaksin, while serving in the Cabinet of an earlier government, and his wife, had secretly owned stocks through nominee companies in SC Asset, a real estate company operated by the Shinawatra family.
The couple allegedly violated regulations requiring them to disclose corporate information to the Stock Exchange of Thailand. Mr. Thaksin was also charged with holding shares in publicly listed companies despite a prohibition against serving Cabinet members to do so.
If found guilty, the ex-premier and his wife face a maximum jail term of five years and a fine equivalent to twice the value of the shares they had traded. TNA

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