Thai End Game?
Publisher, businessman and born-again democracy crusader Sondhi Limthongkul likes to think of himself as a martyr-in-waiting. The sworn enemy of embattled Thai leader Thaksin Shinawatra, Sondhi routinely tells his weekly talk show audience that he is willing to die in his effort to see his nemesis banished from politics; he claims men with assault rifles have blasted away at his house.
Sondhi, who once called Thaksin the country's ‘’best prime minister ever’’, has spent the past 10 months risking his fortune and future to try and oust Thaksin permanently from office. But in assessing the ongoing power struggle between the two former friends, it's best to look past Sondhi's often self-indulgent talk and follow the money – of which, at the moment, the media tycoon doesn't appear to have much. For better or worse, the squabble between two of Thailand’s leading figures has led to concerns that if nothing else, Thaksin may be using his influence to drive his enemy out of business – after often being credited with helping to bail Sondhi out of bankruptcy five years ago.
Now Sondhi is feeling the pinch. With Thaksin still around as caretaker prime minister ahead of elections in October, Sondhi is struggling to pay employees of his newspaper, magazine and website group on time and he claims that government officials are putting the squeeze on local banks to stop giving him loans.
It is another curious turn for two former associates. In the early 1990s, when his Manager Media Group was booming, Sondhi bought several IT and telecommunications firms, including a mobile phone handset distributor called IEC. He also poured money into ventures across Asia, from satellites and hotels to television stations, a daily regional newspaper, a Hong Kong based magazine and even a cement factory. In 1996, Fortune magazine said the media mogul was worth about $500 million.
During that period, Sondhi regularly did business with Thaksin, who bought handsets from IEC through his mobile phone operator Advanced Info Service (AIS). In 1992, Sondhi sold Thaksin 17.5 percent of IEC at 10 baht per share before taking the company public. The share price shot up 25 times after the float, and Thaksin cashed out soon after – netting more than US$20 million from the transaction.
Both men enjoyed success during the boom years of the 1990s. But their fortunes diverged drastically after the government floated the baht on July 2, 1997, setting off the downward spiral that became a regional financial crisis. Thaksin's Shinawatra Corporation came out of the crisis relatively unscathed compared to its rivals. AIS, a Shinawatra subsidiary, quickly came to dominate the mobile-phone market. Thaksin has claimed the company was fortunate enough to hedge its foreign loans six months before the crisis; while Sondhi insists Thaksin was tipped off to the flotation by government insiders.
Sondhi's empire, meanwhile, collapsed. The Manager Group had racked up tens of millions of US dollars worth of debt, and Sondhi was forced to declare bankruptcy. The crisis led his heavily gutted Thai-language newspapers to furiously attack the Democrat Party government.
When his old business pal was heading into serious politics, Sondhi used his media outlets to promote Thaksin's fledgling Thai Rak Thai party, and many Manager-linked figures took on key government roles and plum positions at state-run companies. Pansak Vinyaratn, the editor-in-chief of Sondhi's now-defunct English-language daily Asia Times, became Thaksin's chief policy adviser, while Manager co-founder Somkid Jatusripitak currently serves as Commerce Minister and has been tapped as Thaksin's potential successor.
The connections helped both men five years ago. Thaksin surged to power, and Sondhi climbed out of the financial hole. The media giant's former financial adviser, Viroj Nualkhair, became CEO of Krung Thai Bank, the country's second largest. Under his leadership, Manager's debt to the bank was slashed from about $45 million to a mere $5 million. Sondhi then launched the cable channel Asia Satellite TV (ASTV), won several television contracts, including one to produce his famous Muang Thai Rai Sapda (Thailand Weekly) talk show on a state-owned television station. He also invested in government-run Channel 11, out of which the government planned to develop two new channels.
So why did Sondhi turn against Thaksin so vehemently? While the fallout has been the subject of much speculation, many believe it was a combination of reasons related to business.
Two years ago, Krung Thai Bank shocked investors by reclassifying 40 billion baht as problem loans, and pressure mounted on Viroj to voluntarily resign. Sondhi vigorously defended the man who so generously trimmed his debt, but Viroj eventually stepped down. In addition, the government cancelled its plan to develop two new channels
out of Channel 11.
Tensions reached a breaking point last September, when the government canceled Sondhi's television show, claiming he improperly mentioned Thailand's revered King Bhumibol Adulyadej. Sondhi decried it as an abuse of free speech, which helped him win the support of an initially suspicious public. His profile increased as he took his talk show on the road, seeming to reveal new corruption scandals by the week.
In return, Thaksin filed a series of libel suits against Sondhi worth millions of dollars – a move that only seemed to bolster Sondhi's image as a freedom fighter.
The dispute between the two appeared to dissipate briefly last year after the King, in his annual birthday address on December 5, told Thaksin (indirectly, as always) to accept criticism. Thaksin immediately dropped the lawsuits, and Sondhi sought other ways to keep up the anti-Thaksin momentum.
Then last January, like a gift from heaven, Thaksin's family offloaded its stake in Shin Corp to Singapore-based Temasek Holdings for US$1.9 billion in a largely tax-free sale. The deal unified the anti-Thaksin forces into a loose coalition, and Sondhi started leading mass street protests throughout Bangkok. His patented chant "Thaaaaksin: Get out!" echoed throughout the city streets. With the fear of violence in the air, Thaksin was forced to call an early election in February – and Thailand has been without a Parliament ever since.
While that may have seemed like a victory for Sondhi and the anti-Thaksin coalition, it wasn't. Knowing that Thaksin would easily win an election, the opposition parties boycotted. In the tense weeks before the election, thousands of people were in the streets trying to drive Thaksin from office. It appeared that it might work at first. Despite Thai Rak Thai’s 16 million votes on April 2 – more than double what the nearest opposition party received in the 2005 national election – Thaksin tearfully announced that he would decline the premiership in order to promote national unity.
Mission accomplished? Not quite. King Bhumibol's intervention a few weeks later led to the nullification of the snap election and the jailing of members of the Election Commission, which most observers regarded as shills for Thaksin. A new election is now scheduled for October 15, and a brand new commission will make it hard to dispute the result – likely another comfortable win for Thai Rak Thai due to their support in rural areas. It's still unclear whether Thaksin will serve as PM in the next government. The party states publicly that he will top the party list. With the Shin Corp sale profits, Thaksin has more money than ever for the election campaign, and has managed to placate the party's many regional factions.
So Sondhi is now fighting to stay relevant – and solvent. As disparate groups once again look to the political process and the public tires of the impasse, the publisher is desperately trying to whip up some new anti-Thaksin sentiment. Meanwhile, employees of several Sondhi vehicles are facing delays in getting their checks and he is said to be looking for new sources of money in the face of bank pressure while some of his increasingly disgruntled employees look for new jobs.
Although newsstand sales of his Thai-language flagship newspaper, Phoodjakarn, have increased throughout the crisis, ad revenue throughout the group has dropped sharply. Many large businesses don't want to be associated with the sharp-tongued Sondhi and he has been forced to lay off nearly 100 employees of his satellite TV arm. It is also unclear how long ThaiDay, his most recent English language daily, which is distributed in editions of the International Herald Tribune in Thailand, can stay afloat. His English language regional website, Asia Times Online, continues to publish but employees of the site have also had to suffer with delayed salaries.
Moreover, Sondhi's weekly talk show has lately failed to generate the large crowds that flocked to see him speak six months ago. The weekly revelations have dried up, and his more outlandish statements have fallen on deaf ears. In May, Sondhi alleged – without offering hard evidence – that Thaksin had gone to Finland in 1999 and concocted a
plan to undermine the monarchy in favor of democracy (a huge no-no in Thailand). Thai Rak Thai vehemently denied such a plan existed.
Thaksin has since leveled a $25 million libel lawsuit against Sondhi for the remark – and it seems unlikely King Bhumibol will again entice Thaksin to drop the charges. Sondhi's willingness to use controversy over the monarchy for political gain has angered people across the political spectrum. About a month ago, Thaksin stunned Thailand’s citizens by referring to an unnamed "influential person" who was attempting to overthrow democracy. It was widely thought he was referring to retired General Prem Tinsulanonda, the President of the royal Privy Council and a former Prime Minister who is widely viewed as a Thaksin critic. Wading in, Sondhi called on the public to "take sides" in what he characterized as a dispute between Thaksin and King Bhumibol.
Sondhi’s call was roundly condemned. Then a week later, Sondhi claimed that Thaksin had done nothing to stop the publication of “The King Never Smiles,” a biography of King Bhumibol written by journalist Paul Handley and published by Yale University Press. Banned in Thailand, the book argues that King Bhumibol has thoroughly meddled in Thai politics throughout his six decades on the throne – a view that runs counter to what most Thais are taught to believe.
Sondhi's charges were answered by his former friend and current Thaksin adviser Pansak, who told a local radio station that the government had sent a senior official to personally discuss the matter with former US president and Yale alumni George HW Bush. Most local newspapers didn't even report the episode. Government officials were infuriated, however, when Sondhi posted the book's cover on his popular Manager website. Although he took it down hours later, government officials saw it as an attempt to incite the public.
Is Sondhi a spent force? Many people in Bangkok think so. He seems to be exhausting his resources and his ability to roil the masses has waned considerably. His popularity was driven by the long-overdue criticisms he made of a premier who once seemed invincible. But now that Sondhi has exposed Thaksin's flaws, voters still see no real alternative.
Common wisdom suggests that a new Thaksin-led government will do everything it can to bring Sondhi to his knees. Whispers around town say that Sondhi is considering a period in exile. Whatever is true, the anti-Thaksin media firebrand's back is squarely against the wall.
Meanwhile, his employees just hope they get paid.