Auction winner of 10-year-old rice faces probe over ability to pay

The Commerce Ministry has told the Department of Business Development to investigate V8 Intertrading Ltd, a Kamphaeng Phet company that won the bid for 15,000 tonnes of 10-year-old rice stored under the Yingluck Shinawatra government’s rice-pledging scheme.

The investigation aims to ensure the company, which offered 286 million baht or about 19.07 baht per kilogram for the rice, is capable of fulfilling the purchase contract, Commerce Minister Phumtham Wechayachai said on Tuesday.

Public concern surfaced after the Public Warehouse Organisation (PWO) unveiled the amounts offered by all six companies participating in the auction on Monday, which put V8 Intertrading as the highest bidder.

Critics said V8 Intertrading was relatively very young, having registered only in March 2020, and had a very small declared capital of just 2 million baht. In 2023, the company posted a revenue of 2.29 million baht and a profit of 246,180 baht.

“The price quoted is subject to negotiation and the final price could be higher or lower, but no lower than what the 2nd highest bidder proposed,” Phumtham, who doubles as deputy prime minister, said.

“We have checked and found that the company only has 2 million baht as registered capital and about 1 to 2 million baht as operating budget. The investigation will ensure that they can complete the purchase of the rice,” he said.

Phumtham added that the government could refuse to sell the rice if it turns out that the company lacks qualifications or the ability to fulfil the contract.

When asked about the possibility of bid rigging, he said: “I’m not sure, but we will investigate this issue thoroughly. If the investigators find evidence of rigging or price fixing, then all parties involved will be considered guilty.”

However, he said, the top priority now is to release the stock of rice while protecting the country’s interest.

The minister also dismissed public concern that the winner of the bid may mix the decade-old rice with new rice and sell it as new. He said after the contract is signed, the bid winner will have to ensure the rice undergoes quality improvement process overseen by the Food and Drug Administration and other relevant agencies. If the rice were to be exported, it would by checked by governing bodies as well, he said.