New scandal embroils TOT, power firms

New scandal embroils TOT, power firms

Probe into US firm puts focus on agencies

Three state-owned firms were allegedly receiving kickbacks from the US company in return for buying its electricity and telephone cables. (Main photo via General Cable Corp)
Three state-owned firms were allegedly receiving kickbacks from the US company in return for buying its electricity and telephone cables. (Main photo via General Cable Corp)

A new bribery scandal has emerged potentially landing three more state enterprise agencies in hot water as investigations get under way.

The fresh scandal involves the Metropolitan Electricity Authority (MEA), the Provincial Electricity Authority (PEA) and TOT Plc.

The investigations follow the US Department of Justice's recent announcement of legal action it has taken against Kentucky-based General Cable Corporation, a manufacturer and distributor of cable and wire.

The US government is investigating allegations of bribery payments to government officials in Angola, Bangladesh, China, Indonesia and Thailand.

The US company claimed in a Business Wire press release last month that it had agreed to pay $82.3 million (2.9 billion baht) to settle the US government's charges against it and avoid prosecution. In addition it will report to the government future sales for three years.

General Cable now faces a class-action lawsuit from investors over the bribes.

The scandal is unrelated to the one in which Rolls Royce admits bribing Thai state officials and THAI Airways company executives.

Interior Minister Anupong Paojinda said yesterday the MEA and the PEA, which are under the ministry's supervision, will set up panels to establish facts on the matter. Discussions will be held on how to proceed when all information has been gathered, he said.

Permanent secretary for interior Grisada Boonrach, in his capacity as chairman of the MEA board, said he has instructed the MEA governor to set up a panel to look into the case. However, MEA regulations do not specify a time frame for such an inquiry.

Mr Grisada said he has also told Thawil Pliensri, chairman of the PEA board, to set up a panel to probe the scandal.

Sermsakul Klaikaew, PEA governor, yesterday said the PEA deputy governor has been assigned to lead the inquiry, with officials from the Justice Ministry joining the probe.

He said the probe is expected to be wrapped up in 15 days before the findings are released to the public.

Mr Sermsakul said the PEA had bought cable and wire from several companies via auctions which were in line with procurement regulations. The panel will need time to verify from which companies it bought cables, he said.

Chaiyong Puapongsakorn, the MEA governor, said a panel is being formed to establish facts, along with a panel to investigate the procurement process.

According to the MEA regulations, the inquiry must be completed in 90 days, though the MEA will finish the inquiry as quickly as possible as the issue has received widespread public attention, Mr Chaiyong said.

TOT president Monchai Noosong said he has acknowledged the allegations of bribery concerning his company and the TOT board has ordered its management to look into the case.

Justice Minister Suwaphan Tanyuvardhana yesterday said he has instructed Prayong Preeyajit, the secretary-general of the Public Sector Anti-Corruption Commission (PACC), to seek information about the TOT and PEA scandals from the anti-graft bodies investigating the Rolls-Royce bribery scandal, in which state enterprises have become similarly embroiled.

They include the National Anti-Corruption Commission, the PACC and the Office of the Auditor-General.

General Cable did business in Angola, Bangladesh, China, Indonesia and Thailand via Phelps Dodge International (Thailand), or PDTL.

According to the statement of facts of the investigation, from 2012 to 2013, PDTL provided more than US$1.5 million (52.8 million baht) in rebates to a distributor in Thailand with the understanding the distributor would use the money, in part, for corrupt purposes in association with PDTL's sales to state-owned customers in Thailand. These included sales to the PEA, the MEA, and TOT Plc.

In or about 2011, "Executive A", identified as an official of the PDTL, met a high-level executive at General Cable who was responsible for overseeing international operations and expressed concerns that payments to the distributor in Thailand were being used for corrupt purposes. Despite this conversation, the corrupt payments did not stop, nor was an investigation conducted.

On Dec 13, 2011, the high-level executive at General Cable received emails that included the following statement regarding the findings of a tax review in Thailand: "potential applicability of the US Foreign Corrupt Practices Act ['FCPA'] for commissions paid to Thai governmental authorities."

Another email from a General Cable employee with responsibility for corporate taxes stated: "Since this is a legal matter rather than tax, no need to do anything further for me. I will leave it up to you as to whether you want to look into any further."

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