Three rich businessmen who lost everything in 1997 warn that it could happen again soon.
From left, Sawasdi Horrungruang, Boonchai Bencharongkul and Prachai Leophairatana. The three business tycoons discussed how they survived the 1997 crisis (Photo by Pawat Laopaisarntaksin)
Tycoons of disasterurge caution
State policies creating a bubble they warn
Three businessmen who lost most of their empires during the tom yum kung crisisare warning of a nascenteconomic bubble blaming policies that have encouraged consumers to take on debtwhile the government borrows hugely to spurthe economy.
Boonchai Bencharongkul, a founderof No.2 mobile operatorTotal Access Communication (DTAC), voiced concernabout a potentialnew crisisforming.
"I think the currentsituation is worrisome As one of those who had such an experience I can smell it now. People are rushing and competing to buy condos while more and more people are driving Ferraris. These are the same things we saw before the 1997 crisisoccurred," Mr Boonchai told a forumhosted by Thansettakij newspaper Thursday.
He said populistpolicies such as the first-time car buyer tax rebatehave prodded people to borrow from banks as part of the government's attempt to boostgross domestic product (GDP).
"Don't focusso much on GDP. In the end, people really care about how much money they have left in their pockets," he said.
Sixteen years ago on July 2, the baht was floated after having been fixed at about 25 to the US dollar. The baht eventually plunged to 56 baht, dealing a lethalblow to firms borrowing in dollars, as was the trendat the time.
As Thai companies fell, multinationals descended in drovesto buy bad debt causing resentmentin many quarters
DTAC was the first company to enter a debtrestructuring processwith its 50 creditors, supervised by the Bank of Thailand.
Although Mr Boonchai remains one of Thailand's wealthiest tycoons, his empirewas taken over by the Norwegian telecommunicationsgiant Telenor.
He said he spent the next eight years licking his wounds and another eight redefining his strategy
"Don't over-invest, and if possible, do not borrow to expandthe business," said Mr Boonchai, adding that the government itself should not overspend.
"This time, the natureof the crisismight be different. Last time it was the private sectorthat went bankrupt but this time we might see the government collapse"
Sawasdi Horrungruang, a formertycoon who founded the NTS Steel Group, said the government should not borrow beyond its capacityto service the debt which will eventually become the burdenof taxpayers.
Mr Sawasdi foundhimself saddled with debtexceeding US$2 billion by the time the 1997 crisiswas over.
NTS was merged with the Siam Cement Group's steelunitand was later sold to India's Tata Steel.
Another steelfirm of Mr Sawasdi's empire Nakornthai Strip Mill, was merged with Somsak Leeswadtrakul's G Steel Plc.
Mr Sawasdi also urged cautionregarding the Thai government's plan to help develop a deep-sea portand other infrastructurein Dawei, Myanmar, at a cost of several hundred billion baht.
Prachai Leophairatana, a founderof Thai Petrochemical Industry (TPI), blamed the government's failure to protectThai businesses during the 1997 crisisfor destroying entrepreneurship in the country.
With debts approaching 100 billion baht, he was forced to sell most of his business empireto survivethe crisis leaving only TPI Polene (TPIPL), a unitaccounting forjust 10% of the group's originalasset value
After filingfor bankruptcy, TPI's petrochemicalbusiness was taken over by the state oil company PTT.
"[The 1997 crisis] was the government's failure. And the government should have protected investors ... I'm still sad that the government did not help [Thai companies] but just made things worse," Mr Prachai said bitterly.
He has bounced back somewhatfrom the crisis His SET-listed TPIPL, Thailand's third-biggest cementmaker, plans a new investmentof 10 billion baht, half of it to expandcementproductioncapacity.
The project which will increase TPIPL's capacityto 12 million tonnes by 2026, had been suspended since the crisisbut is resuming now.
Learn from listening
Click "play" to listen to Tycoons of disaster and "Download" to keep this file for educational purpose.
accounting for: being -
assets: things owned, especially property and money - สินทรัพย์
bankrupt: without enough money to pay what you owe - ล้มละลาย
bitter: involving very angry feelings - ความขมขื่น
blame: to say or think that someone or something did something wrong or is responsible for something bad happening - โยนความผิดให้, ตำหนิ
blow: a sudden event which has damaging effects on somebody/something - การโจมตี, การชก,การต่อย
boost: to increase - เพิ่ม
bounce back: to become healthy, happy, or successful again after something bad has happened to you - กลับสู่สภาพปกติ
bubble: bubble - economic bubble; an economic situation in which prices of stocks or real estate rise very quickly and many people make a lot of money and then lose money when the "bubble bursts" - เศรษฐกิจฟองสบู่
burden: a serious or difficult responsibility that you have to deal with - ภาระ
capacity: the ability to do a particular thing - ความสามารถ,สมรรถภาพ
caution: careful thought and lack of hurry in order to try to avoid risks or danger - ความระมัดระวัง
cement: a grey powder made by burning clay and lime that sets hard when it is mixed with water. Cement is used in building to stick bricks together and to make very hard surfaces - ปูนซีเมนต์
collapse: (of people and business) to fail suddenly; to suddenly be unable to continue or work correctly - ล้ม (ธุรกิจ)
compete: to try to be more successful or better than somebody else who is trying to do the same as you - แข่งขัน
concern: a worry - ความกังวล
consumer: someone who buys and uses goods and services - ผู้บริโภค
creditor: someone to whom money is owed - เจ้าหนี้
crisis: an urgent, difficult or dangerous situation - วิกฤต
current: of the present time - ปัจจุบัน
debt: an amount of money that you owe - หนี้
deep sea port: a port with deep waters that can handle very large ships - ท่าเรือน้ำลึก
disaster: something very bad that happens and causes a lot of damage - ความหายนะ
empire: a group of commercial organizations controlled by one person or company - เครือบริษัทที่ยิ่งใหญ่
encourage: to cause someone to want to do something - กระตุ้น ให้การสนับสนุน
entrepreneur: someone who starts their own business, especially when this involves risks - นักลงทุนทางการเงิน
exceed: to be more than something; to go beyond a limit - เกินกว่าที่กำหนด
expand: to make or become larger - ขยาย
expand: to make or become larger - ขยาย เพิ่ม
experience: the knowledge and skill that you have gained through doing something for a period of time - ประสบการณ์
filing: formally giving a document to someone for their consideration - การยื่นเอกสาร
firm: a business or company - บริษัท
float: float currency, when a government allows the country's currency to moving freely and be determined by what people are willing to pay for it -
focus: to give attention, effort, etc. to one particular subject, situation or person rather than another - เพ่งความสนใจ
former: of or in an earlier time; before the present time or in the past - อดีต, แต่ก่อน
forum: a place where people can express their ideas and opinions - การประชุมแสดงความคิดเห็น
found: to start an organization, company, political party etc - สร้าง, ก่อตั้ง, สถาปนา
founder: a person who establishes an institution, business, or organisation - ผู้ก่อตั้ง
gross domestic product: the total value of all goods and services produced in a country in a year, except for income received from money invested in other countries. It is often simply called GDP - ผลิตภัณฑ์มวลรวมภายในประเทศ
host: to provide the space and other things necessary for a special event - ทำหน้าที่เป็นเจ้าภาพ, เป็นผู้จัดรายการ
in droves: of a large group, especially of people, moving towards a place or doing something at the same time -
infrastructure: a set of systems within a place or organisation that affect how well it operates, e.g., the telephone and transport systems in a country or the system of train tracks that a railway uses - สาธารณูปโภค
invest: to spend money on something in order to make it better or more successful - ลงทุน
investment: the act of investing money in something - การลงทุน
investor: a person or organization that invests money, i.e., uses money with the aim of making a profit from it, for example by buying property or buying shares in a company - นักลงทุน
lethal: very dangerous and able to kill you - เป็นอันตรายถึงชีวิต
listed firm: a public company, i.e., a company that offers its shares to the public on a stock exchange - บริษัทมหาชน
merge: join two two or more things together into one thing; combine, integrate - รวม, รวมเข้าด้วยกัน
mobile (technology): of devices, especially telecommunication devices, that can easily be moved around, e.g., mobile phones, tablets, notebook computers - อุปกรณ์ซึ่งเคลื่อนที่ได้ง่าย
multinational: a company that operates in many different countries, especially a large and powerful company - บรรษัทข้ามชาติ, บริษัทระหว่างประเทศ
nascent: just starting or beginning now, being born or starting to exist now - พึ่งเริ่มใหม่, ยังใหม่อยู่, พึ่งเริ่ม
nature: the basic quality of feature of something - ลักษณะที่แท้จริงของสิ่งต่างๆ, ธรรมชาติ
operator: a person or company that runs a business - ผู้ดำเนินกิจการทางธุรกิจ, ผู้ประกอบธุรกิจ
original: the first of something - เดิม, แบบฉบับ
petrochemical: any chemical substance obtained from petroleum oil or natural gas - สารที่ได้จากน้ำมันปิโตรเคมี
plunge: to move or fall suddenly - ลงอย่างเร็ว, (อุณหภูมิ)
policy: a set of plans or action agreed on by a government, political party, business, or other group - นโยบาย
populist: related to the type of politics that claims to represent the opinions and wishes of ordinary people or to support programmes that will benefit the ordinary people - ประชานิยม
port: an area where ships and boats stop - ท่าเรือ
potential: possible in the future - ที่อาจเป็นไปได้
private sector: businesses and industries that are not owned or controlled by the government - ภาคเอกชน
process: a series of actions that you take in order to achieve a result - แนวทางปฏิบัติ, กระบวน, วิธีการ
prod: to push someone/something quickly - แหย่, แยง
production: the process of making goods or materials, especially large quantities - การผลิต
project: a planned piece of work that is designed to find information about something, to produce something new, or to improve something - โครงการ
protect: to make sure that somebody/something is not harmed, injured, damaged, etc - ป้องกัน,อารักขา,คุ้มกัน
quarters: a group of people - กลุ่มคน
rebate: an amount of money that is taken away from the cost of something, before you pay for it - ส่วนลด, เงินภาษีที่ต้องคืนให้
resentment: a feeling of anger because you have been forced to accept someone or something that you do not like - ความไม่พอใจ
restructure: to organise something such as a company in a different way so that it will operate better - ปรับโครงสร้างใหม่
resume: to begin again after stopping for a period of time - เริ่มอีกครั้ง, กลับมาอีกครั้ง
rush: to move or do something very quickly - รีบเร่ง, วิ่ง
saddle with: to receive or get some problem that is difficult to solve and deal with -
service debt: pay interest on money that has been borrowed -
situation: all the circumstances and things that are happening at a particular time and in a particular place - สถานการณ์
somewhat: partly but not completely - บ้าง, บางส่วน
spur: to cause something to happen - ก่อให้เกิด
steel: A variety of iron intermediate in composition and properties between wrought iron and cast iron (containing between one half of one per cent and one and a half percent of carbon), and consisting of an alloy of iron with an iron carbide. Steel, unlike wrought iron, can be tempered, and retains magnetism. Its malleability decreases, and fusibility increases, with an increase in carbon. - เหล็ก
strategy: a plan or method for achieving something, especially over a long period of time - ยุทธวิธี, แผนการ
supervise: to be in charge of an activity and to check that everything is being done correctly - ดูแล ควบคุม
survive: to continue to exist - อยู่รอด สืบต่อไปได้
suspend: to stop for a period of time - ยกเลิกชั่วคราว, ระงับชั่วคราว
take over: take over a business; an act of taking control of a company and owning it by buying most of its shares - ครอบงำกิจการ
telecommunications: the science and technology of sending information by telephone, radio, or television - โทรคมนาคม
trend: a gradual change or development that produces a particular result - ทิศทาง แนวโน้ม
tycoon: a person who has succeeded in business or industry and has become very rich and powerful - นักธุรกิจที่ร่ำรวยและมีอิทธิพลมาก
unit: a business unit or subsidiary; a part of a company that does a particular activity or that is not divided into smaller parts - บริษัทลูก, บริษัทสาขา, บริษัทในเครือ
urge: to advise someone very strongly about what action or attitude they should take - วิงวอน ย้ำเตือน
value: how much something is worth in money or other goods for which it can be exchanged - มูลค่า
warn: to make someone aware of a possible problem or danger - เตือน
wealthy: having a large amount of money, land, and other valuable things - ที่มั่งคั่ง ร่ำรวย
worrisome: worrying; causing worry or anxiety - ซึ่งน่าวิตก
Latest stories in this category:
- Protests: "Final push" not yet final
- What will happen next in Thai politics? (from the editorial pages)
- Protests: Marching day, PM dissolves parliament
- Protests: “Final battle” starts tomorrow
- A big language challenge
- Chiang Khong bridge to open December 11th
- Rotating house to catch sun & wind: Made in Chiang Rai
- Nelson Mandela dies aged 95