The world’s richest king, his mysterious fortune, and the protesters who want answers

Thailand’s third marriage crown prince made lurid headlines: the princess was stripped of her titles, her parents and siblings jailed on vague corruption allegations, her uncle expelled from his top police post.

Then the heir to the throne had to negotiate a divorce settlement.

Fortunately for the prince, he had access to one of the world’s greatest royal fortunes, a secret holding company laden with stakes in top-tier Thai companies and privileged lands in the heart of Bangkok. The company covered the payment, reportedly close to US $ 6 million (NZ $ 9 million).

Two years later, in 2016, the prince ascended the throne.

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One of the first important acts of King Maha Vajiralongkorn was to transfer all the interests of the vast company, known as Crown Property Bureau, to his personal property, which gave him control of more wealth than reported by the Saudi king, the Sultan. from Brunei. and the British royal family combined.

Those assets, conservatively valued at $ 70 billion, are now the focus of a pro-democracy movement that calls for greater transparency in the monarchy’s finances and the limits of its broad powers.

In August, students at Thammasat University demanded that the king return the assets to the control of the Crown Property Office and place them under government supervision, a surprising act of defiance in a country where a strict insult law Royalists have traditionally silenced criticism of the monarchy.

Some protesters have also called for a boycott of Siam Commercial Bank, in which the king has a nearly 24 percent stake. Fears of a deposit run led a head of Thailand’s central bank to assure investors that there was sufficient liquidity in the country’s financial institutions.

“When the protesters speak of the monarchy as an institution, the CPB is at the center,” said Pongkwan Sawasdipakdi, a Thammasat professor and PhD candidate in international relations at the University of Southern California in the United States.

“One of the main things that people think about is how can the monarchy accumulate such high wealth and we really don’t know anything about it.”

Questions about the expenses of a distant monarch, who lives in Germany and whose expensive lifestyle contrasts with the stories of his thrifty father, have arisen as Thailand’s economy reels from the Covid-19 pandemic, which followed. to years of lukewarm growth under a military policy government closely linked to the ruling family.

Opposition politicians led by legislator Thanathorn Juangroongruangkit have also challenged an additional $ 1 billion in public funds earmarked for the monarchy in the 2020 budget, including security, travel, ceremonies and “special activities,” while the economy to contract by 8%.

Tens of thousands of peaceful protesters have gathered in rallies since early summer, although on Wednesday (US time) a state of emergency was declared in Bangkok and protesters who had surrounded the prime minister’s office were dispersed.

It has been a remarkable political awakening in a country that abolished absolute monarchy in favor of a parliamentary system in 1932, but has steadily drifted away from democratic rule. The army, with royal support, has overthrown a succession of civilian governments and now controls parliament and almost all state institutions.

The military, in turn, came into line when the king assumed control of the Crown Property Office, whose huge interests “go into almost every major area of ​​Thai economic life,” Porphant Ouyyanont, a late Thai academic who he was the main authority in the office. he wrote in a 2015 article.

Created in 1936 to manage the institutional assets of the crown and cover some of its expenses, the office operates in a legal underworld, neither a government agency nor a private institution, nor part of the palace, and in almost total secrecy from within a candy. Yellow Italian-style villa in Bangkok’s leafy royal district.

Its board of directors, elected by the king, does not publish financial statements. Much of its properties, especially on land, remains a mystery. But the esteemed portfolio makes him the richest monarch in the world, a man who owns lakeside villas on the outskirts of Munich and rents a hotel in the Bavarian Alps.

The office’s largest corporate investments, in Siam Commercial Bank and Siam Cement Group, an industrial conglomerate in which it has a 34 percent stake, were together worth about $ 8 billion at the end of last year, according to annual reports from the companies.

Although the bank’s shares have lost half their value during the pandemic, dividends from the two publicly traded companies generated $ 342 million in revenue for the king in 2019.

Porphant estimated that his properties, including 5 1/2 square miles spread out in central Bangkok’s high-rent districts, were worth $ 32 billion in 2015, but little is rented for commercial use.

Scrutiny of these assets was long considered unnecessary because the monarchy and its possessions had “proven not to be a financial burden on the country,” Porphant wrote.

The father of the current ruler, King Bhumibol Adulyadej, who reigned for 70 years, was portrayed in realistic propaganda as so frugal that he never wasted a pinch of toothpaste, even as Thailand became an economic engine of Southeast Asia and the Crown investments multiplied in value. .

King Vajiralongkorn is a different figure.

Educated at a boarding school in Great Britain and a military academy in Australia, the 68-year-old monarch is married to his fourth wife and spends most of his time in Germany, often in the company of a bride known as the “royal consort” and an entourage of assistants and security. Even from that distance he has assumed a more assertive role in Thai politics, putting two military units under his command and changing the law to allow himself to rule from abroad.

In July 2017, nine months after he assumed the throne, a law passed by the military-dominated parliament placed the assets of the Crown Property Office “at Her Majesty’s discretion”, ending the previous agreement according to which the monarch could spend the income of the office at will, but left the decisions of purchase and sale to the board of directors.

The king removed the finance minister and longtime CEO of the board bureau and installed his private secretary, a 69-year-old man with no financial or economic background, as president and several other loyalists as members.

“The assumption must be that the monarch is now the main decision maker,” said Tom Felix Joehnk, a Bangkok-based writer and economist.

Assets are now taxed for the first time, but little else has changed in the portfolio. Vajiralongkorn has retained the equity stakes and has generally continued his conservative approach to the land.

The parcels include some of the capital’s most sought-after neighborhoods, along the Chao Phraya River and in the Silom and Sukhumvit business districts. But Porphant found that 93 percent of the land generated little or no income, rented at “much lower-than-market rates” to slum communities, state agencies, schools, foundations and others with special relationships to the crown.

The latter category includes the US government, which for decades has rented the ambassador’s residence, a stately blue-shuttered mansion surrounded by lawns, for just “a few hundred dollars” a month, Joehnk said.

Critics say the opaque system allows the king to treat land deals as political favors, at odds with the protesters’ goal of a modern constitutional monarchy. In a 2011 interview with author Serhat Unaldi, former director Chirayu Isarangkun na Ayuthaya said the office considered “social benefits … not just financial values” when developing land for commercial use.

Still, the office has sought to extract more money from its land since the 1997 Asian financial crisis temporarily wiped out its income.

The newest tenants include the best shopping malls and luxury hotels in Bangkok. In 2017, he signed several contiguous parcels to build Thailand’s largest private development, a complex of hotels, condos, and a $ 3.6 billion shopping mall in what had been a boxing stadium and night market.

In 2018, the capital’s much-loved zoo suddenly announced it would be moving from crown-owned land across from the former king’s residence to a new site in a northern suburb. The crown has also taken over other properties in the area, fueling speculation that Vajiralongkorn could build Bangkok’s first new royal palace in more than a century.

“There is a lot of land being developed, but it’s not clear to me that there is a change in investment strategy,” Joehnk said. “However, the development of real land for real purposes (would be) new:

Those seeking answers from the office, who did not respond to an interview request, would be disappointed. It has not published an annual report since 2016. Parts of its website show empty pages; Most of the English site is “under construction”.

“The status of the organization is clear now, whereas it was not so clear before,” said Kevin Hewison, emeritus professor of Asian studies at the University of North Carolina at Chapel Hill.

“It was in a legal lowland and it is not now. It is the personal property of the king. But there is much less information about it. “