Wounds of Labour Ministry and OAG clash with top transparency award

The National Anti-Corruption Commission (NACC), through its Office of Ethics and Transparency Assessment, announced on August 15 the results of its Integrity and Transparency Assessment (ITA) rankings for fiscal year 2025. But almost immediately, the results drew a storm of public criticism.

Two agencies topped the rankings, the Ministry of Labour and the State Audit Office (SAO), despite what critics called a glaring contradiction with their recent performance.

Among independent agencies, the OAG came first with 94.64 points, while in the category of ministries with fewer than 15 affiliated agencies, the Ministry of Labour achieved the highest average score of 96.62 points.

Yet both organisations have been mired in controversy earlier this year.

The SAO was widely condemned following the collapse of its newly built headquarters during a historic earthquake in March. The building, worth more than 2.1 billion baht, came crashing down, causing deaths and injuries and making headlines worldwide. 

Although five months have passed and the case has been brought to court, progress has been slow despite the scale of the tragedy.

The building was constructed by the ITD-CREC Joint Venture, a partnership between Italian-Thai Development Plc and China Railway No.10 (Thailand) Co., a subsidiary of a state-owned Chinese enterprise. 

CREC Thailand has more than 14 associated companies, with three Thai nationals acting as directors and shareholders. The company has been awarded at least 29 government contracts worth over 22 billion baht, including 19 procurement projects worth more than 10 billion baht.

Investigations have uncovered questionable practices, including the role of PKW Joint Venture as project supervisor, and irregularities in the terms of reference. 

CREC’s business model in Thailand typically involves entering government tenders by purchasing bid documents but refraining from submitting bids directly, instead partnering with well-capitalised Thai firms to form joint ventures and submit bids together.

Since its establishment in 2018, China Railway No.10 has gradually moved from medium-scale state projects worth around 100 million baht to large-scale concessions worth over a billion baht.

Authorities have divided the facts of the case into three main issues:

• The use of Thai “nominees” to hold shares on behalf of foreign interests.
• The alleged use of substandard construction materials.
• The cause of the building collapse.

Findings on the nominee structure and building collapse have already been concluded by a government-appointed investigative committee under Prime Minister Paetongtarn Shinawatra, with the Department of Special Investigation (DSI) forwarding charges against suspects to the courts.

The Ministry of Labour has come under intense criticism after two MPs from the People’s Party exposed a controversial investment by the Social Security Fund (SSF).

The MPs alleged that the SSF, which is overseen by the ministry, spent more than 6.9 billion baht of insured workers’ money to acquire the Skyy9 building, a deal critics say may not deliver sufficient returns.

The transaction was structured through the purchase of Prime Nine Real Estate Co Ltd, owner of the Skyy9 (formerly Cas Centre) building. Prime Seven Co Ltd was the majority shareholder in Prime Nine, while the largest shareholder in Prime Seven was the Prime Asset Venture Capital Fund, managed by Krungthai Asset Management Plc as trustee, a fund ultimately financed by the SSF itself.

Two ministries were tasked with investigating the case. The Interior Ministry, under then-minister Anutin Charnvirakul, completed its fact-finding probe and forwarded the findings to the Labour Ministry. Later, under Minister Phiphat Ratchakitprakarn, the Labour Ministry appointed its fact-finding panel as a “final act” before his Blue Camp faction withdrew from the governing coalition.

The investigation into the Social Security Fund’s investment in the Prime Asset Private Equity Trust for the acquisition of the Skyy9 building concluded that:

• The investment process was unusually rushed.
• Despite several concerns raised by committees and subcommittees involved, MFC Asset Management Plc, which promoted the trust, was never invited to provide direct clarification.

The findings pointed to a lack of proper due diligence and prudence in approving the investment of Social Security Fund money. The amount invested, when compared with the asset valuation conducted by the official assessment team and the valuation of the Skyy9 property by the Thai Valuers Association, a professional body in the field, showed a significant discrepancy.

It was believed that the trust’s investment in shares of AGRE101 Co Ltd (now renamed Prime Nine Real Estate Co Ltd), owner of the Cas Centre/Skyy9 project, was priced well above its true worth. The process demonstrated a failure to exercise the level of caution and thoroughness expected of public officials, resulting in financial damage to the Social Security Fund.

The Interior Ministry’s investigation further analysed the Skyy9 valuation using discounted cash flow, finding the fair market price should have been around 3.4–3.8 billion baht, less than half of the 6.9 billion baht ultimately paid through the trust investment.

Although newly appointed Labour Minister Pongkawin Jungrungruangkit reassigned Boonsong Thapchaiyuth, Secretary-General of the Social Security Office, to the Prime Minister’s Office in a bid to ensure transparency in the ongoing probe, fresh criticism emerged. People’s Party MP Rakchanok Srinork disclosed that before his transfer, Boonsong had signed off on the reassignment of at least 35 mid- to senior-level civil servants, sparking questions over whether this was a “farewell move.”

Against this backdrop, it is perhaps unsurprising that the awarding of the 2025 ITA transparency champion titles to the Labour Ministry and the SAO has been met with some of the heaviest public criticism in years, given the unresolved controversies casting doubt over both institutions.