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.
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
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
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
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
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