Hints of political interference cloud PTT's top-level reshuffle

The board’s decision last Friday to launch an executive reshuffle within the group is no exception, particularly when the Pheu Thai Party is in power, and fuels fears of political dominance over the national energy company.

Approved on Friday was the reshuffling of four posts that cover PTT and its key subsidiaries. Surong Bulakul, chief executive officer of Thai Oil, will become chief financial officer of PTT. Tevin Vongvanich, PTT’s CFO, will return to PTT Exploration and Production as CEO. PTTEP’s CEO Anont Sirisaengtaksin will oversee PTT Global Chemical and PTT Global Chemical chief Veerasak Kositpaisal will move to Thai Oil.

This attracts public attention because it came after the Yingluck Shinawatra government appointed Arak Chonlatanont, a former executive of Shin Group, who worked directly under former prime minister Thaksin Shinawatra, as energy minister. In fact, Energy permanent secretary Norkun Sitthiphong also won the Thaksin government’s support when he was the dean of engineering at Chiang Mai University and was transferred to the newly established Energy Ministry as a deputy permanent secretary. Today, Norkun sits on the boards of PTT, PTTEP and Thai Oil.

Norkun yesterday defused the criticisms, saying that the reshuffle was within PTT’s rule that sets top executives’ terms at four years. While Surong has led Thai Oil for three years, Veerask has been running PTTCG for three years and seven months. Anon held the PTTEP top job for four years and two months. “It’s not the first time” for the reshuffle, he insisted.

Surong, whose Bt1.6-billion computer-procurement project is subjected to the board’s consideration, said he did not learn of the change before it was announced on Friday. Yet he is confident that with experience in finance, he will do well with the new position. 

Meanwhile, his replacement, Veerasak, has experience in a world-class refinery. PTT has come to the point when responsibility, not individuals, is the first priority, he said.

Yet a source in the industry who asked for anonymity said: “It’s highly possible that political dominance has returned to the group. Through the line of command, it is easy for Thaksin to manipulate the business units for his own benefit.” 

The heart of the changes lies with the new position of Tevin, former CEO of PTTEP, who joined the parent company as CFO in 2004. 

“It seems they are convinced that Tevin will act according to their demands. With eight years remaining, Tevin has ample time to push activities in a way that benefits politicians,” the source said.

“The activities require a huge investment and largely depend on outsourcing. Companies in their circles could be brought in to win contracts from PTTEP. In comparison, Anon may be unable to serve them well, since he will retire next year.” 

There are comments that Anon has not responded well to political orders, he said.

The source recalled an episode years ago, when PTTEP was told to buy an oil field in the Gulf of Thailand from a foreign exploration company, which was one of the companies awarded one exploration concession during the Thaksin era. Against the company’s insistence that it found oil, PTTEP found nothing from prior exploration but it had to act accordingly. 

PTTEP, the exploration arm, generated some 60 per cent of the group’s net profit in 2011. As such, it controls half of the group’s new investment, or about Bt360 billion from 2012-16.

The executive changes will be proposed to shareholders at the annual general meetings of the companies next month, and they should take effect after that. Notably, PTT is owned 51 per cent by the Finance Ministry.

Reports of political influence may be just hearsay, but it is well within the rights of all the other shareholders of PTT and its subsidiaries to pose questions and protect the companies’ transparency and their own interests.