THAI probes its bribery scandal

THAI probes its bribery scandal

Auditor-General to launch own inquiry

Thai Airways International has appointed a 'special task force' to investigate who took the millions in Rolls-Royce engine bribes. (File photo)
Thai Airways International has appointed a 'special task force' to investigate who took the millions in Rolls-Royce engine bribes. (File photo)

Thai Airways International (THAI) Plc has set up a "special task force" to investigate past engine procurements and another task force for corruption prevention in the wake of Rolls-Royce's admission to a bribery scandal involving several countries, including Thailand.

THAI president Charamporn Jotikasthira said Thursday the task force was set up to investigate the bribery admission made by Rolls-Royce concerning THAI engine and maintenance procurement between 1991-2005, and to take appropriate action on the findings.

The panel is chaired by Niruj Maneepan, adviser to the office of the THAI president.

Another task force has also been set up, headed by Pichait Riengvattanasuk, vice-president in charge of risk management, to investigate procedures for engine procurement and maintenance to ensure they are sound, without any loopholes.

Integrity pacts between THAI and engine procurement and maintenance companies will also be pursued to ensure no bribery among THAI staff, Mr Charamporn said.

Also on Thursday, Transport Minister Arkhom Termpittayapaisith said the inquiry panel will be given 30 days to wrap up the bribery probe.

He said the panel needs to look at three issues: whether THAI's current acquisition process is transparent enough, how the current acquisition process differs from the past one, and who was involved in the bribery Rolls-Royce has admitted to.

If the probe implicates any former THAI executives or personnel, they must be prosecuted with no exceptions, Mr Arkhom said.

Mr Charamporn said he was confident the probe would be wrapped up before deadline. He added representatives of Rolls-Royce (Thailand) will today provide further details to THAI.

NOTE This graphic does not indicate involvement in bribery by the people mentioned, but only is a list of those in executive and political positions during the respective periods. Story continues below.
For full high-res graphic, click here.

Former finance minister Thanong Bidaya, who served as a THAI board chairman between June 2002 and March 2005, denied any involvement in the scandal.

During his chairmanship, the THAI board never approved any purchase of Boeing 777 aircraft with Rolls-Royce's Trent 800 (T800) engines, Mr Thanong said, adding the purchase of Boeing 777 aircraft took place before he assumed the THAI board chairmanship. He said the aircraft purchased during his chairmanship were only from the Airbus family, such as Airbus A340-600, Airbus A340-500 and Airbus A380.

Auditor-General Pisit Leelavachiropas said he has instructed inspectors at his office to examine all purchases by THAI of aircraft with Rolls-Royce engines. The UK's Serious Fraud Office (SFO) revealed 12 counts in which Rolls-Royce engaged in corruption or failed to prevent bribery in seven countries -- Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia.

The bribery case in Thailand involved the purchase of engines for THAI aircraft, but officials said no Thai complaint was filed.

According to the statement of facts prepared in a British court, the period of the scandal dates from 1991-2005 and involves a US$36.38 million (1.28 billion baht) payment to "regional intermediaries". Some of the money was for individuals who were "agents of the state of Thailand and employees of THAI Airways". The conspiracy to corrupt involved the purchase by THAI of Rolls-Royce T800 engines, according to the document.

The scandal occurred during three periods of time. One concerned the period between June 1, 1991 and June 30, 1992 when THAI placed an order for six Boeing 777 aircraft which was later increased to eight.

Rolls-Royce agreed to pay $18.8 million to intermediaries during the period to "influence the purchasing decision".

The second period was between March 1, 1992 and March 31, 1997 when Rolls-Royce agreed to pay $10.38 million to intermediaries and some of the money went to THAI employees, in particular, "those individuals who were expected to act in Rolls-Royce's favour" with respect to a second purchase by THAI of T800 engines. At the time, THAI made a second purchase of six Boeing 777 aircraft, according to the document.

The third period was between April 1, 2004 and Feb 28, 2005. Rolls-Royce agreed to pay almost $7.2 million to intermediaries.

"A proportion of these monies was intended for individuals who were agents of the state of Thailand or THAI employees and those individuals were expected to act in Rolls-Royce's favour with respect to a third purchase by THAI of T800 engines," it said.

According to the document, an intermediary referred to as Intermediary 3 was seeking payment of half of the T800 commission by Dec 17, 2004.

An internal Rolls-Royce email on Dec 4, 2004 concluded: "WARNING: [the Regional Intermediary and Intermediary 3] have dinner with [the Thai Government deputy minister whom they had met] on 18th Dec and hence [the Regional Intermediary] may suddenly decide to support [Intermediary 3]'s request." [...] "We should be firm in my view. Comments?"

Do you like the content of this article?