While it has been widely known for a long time that the Thai military is heavily involved in business and commercial interests, the anatomy of businesses under the control of the armed forces is hardly known, as most of them have been concealed.
The House of Representatives set up an ad hoc committee in late January to explore the possibilities of freeing the military from involvement in businesses in a bid to rid the armed forces of corruption and conflict of interest, so they could stay focused on their primary responsibility: national defense.
The public in Thailand got a glimpse of the dark side of the military’s business activities in early 2020 when a junior army officer went on a shooting rampage, killing 30 people including himself, in northeastern Nakhon Ratchasima province in a rage over a business deal involving a housing welfare scheme.
In a move to regulate business-related welfare schemes within the barracks, then Army chief General Apirat Kongsompong signed a memorandum of understanding (MoU) with the Finance Ministry’s Treasury Department in February 2020 to classify the types of business from which the Army needed to share revenue with the department.
The Navy and the Air Force also have numerous business interests in various sectors, but they did not toe the Army line. They argued that they were involved in many businesses for the internal welfare of troops and their families, rather than making profit for commercial purposes.
Varied business interests
Military economic activities were divided into three categories: internal welfare, whose customers were mostly troops and members of their families and where all of the revenue was spent entirely on the welfare of the units; general business, such as gas stations and retail shops; and special businesses, such as boxing stadium, golf courses, hotels and resorts.
There was no clear criteria to categorize the types of business. All business enterprises, where more than 50 per cent of customers are outsiders — involving neither the military nor members of their families — are required to pay rental fees for land use to the Treasury Department, according to the 2004 Prime Minister’s Office regulations on business of state agencies.
In many cases, such as PTT gas stations, 7-Eleven convenience stores and Amazon Café, the military units simply provided space in their camps for rent to the private sector or individual businesses. The military got only rental fees as income from such businesses.
Since the signing of the 2020 MoU, the Army has identified 60 businesses under its control who were required to pay rent to the Treasury Department for land use, but only 25 of them —including four resorts in Prachup Khiri Khan, Chiang Mai, Chiang Rai and Phetchaburi provinces — were able to pay up, according to testimonies provided by military officers to the ad hoc panel in February.
Stakes in private companies
Testifying to the House’s ad hoc panel on transferring businesses out of the military’s control, the representatives of the armed forces stuck to their guns, saying they were not involved in commercial interests, but were running some enterprises only to generate income for troops’ welfare or security purposes.
There is no law that allows the armed forces and their personnel to get involved in business activities. A military junta, which seized power in October 1976, and whose order is still effective, even prohibited military and police officers from doing business.
The Commerce Ministry’s Business Development Department, however, said that 36 military agencies under the Defense Ministry’s jurisdiction held numerous shares in many companies. The purpose of the share holdings was purportedly to generate extra income from the share dividends for the military units.
Stakes in TMB Thanachart Bank, previously Thai Military Bank, were held by many military units including the Defense Ministry’s Finance Department and the Office of Permanent Secretary, the Thai Armed Army command, the Navy as well as the Air Force and its operations department.
The Navaminda Kasatriyadhiraj Royal Thai Air Force Academy held shares in Thai Airways International Co Ltd.
The Air Force Welfare Fund has stakes in Thai Aviation Industries and Bangchak Corporation. Military-run agencies, such as the Defense Ministry’s Savings Cooperative, the Thai Armed Force Headquarters’ Savings Cooperative, the Army Secretary Office’s Savings Cooperative, the Army Chemical Department’s Savings Cooperative, and the Air Force’s Savings Cooperative hold stakes in Saha Life Insurance Co.
The Defense Technology Institute, a public organization under the Defense Ministry, held numerous shares in many private companies relating to its field, including Advanced Defense Technology and Innovation, Thai Defense Industry, and Aero Technology Industry.
The Welfare Fund of the Army television network, TV5, has stakes in Siam Medical Company, which runs Paolo Memorial Hospital. The Navy has shares in Bangkok Expressway and Metro, which provided services on the expressway and metro system.
A mysterious enterprise
The executives of TV5 testified before the House’s ad hoc committee many times that the Army had obtained broadcasting licenses from telecom watchdog National Broadcasting and Telecommunications Commission to run a television network as well as two multiplexers — digital data transmission system better known as MUX — for security purposes.
They said the legal entity of the TV network is an agency under the Army’s jurisdiction but denied any linkage to RTA Enterprise, a public company in which General Direk Deeprasert, the representative of the Army, held shares, according to data from the Business Development Department.
Other online databases indicated that RTA Enterprise was registered on August 19, 2003, as a holding company engaged in the telecommunications business. The company’s 2023 annual report revealed that its biggest shareholder was Lt-General Songkhram Donnangpha, the former chief advisor to TV5 director, with a 50 per cent stake in the company.
Many other shareholders were Army officers. Many directors of TV5 in the past were named as executives of RTA Enterprise, such as General Kittichet Sornditphan (2019-2020) and General Rangsi Kitiyansap (2021-2022).
The current director of TV5, General Nirandorn Srikacha, told the committee that he knew nothing about the relations between RTA Enterprise and TV5 in the past. However, local media Issara News Agency reported in 2019 that the Army, via TV5, granted a 1.2-billion-baht loan without interest for five years (2020-2025) to RTA Enterprise.
The company’s annual report showed that the major sources of its income were from content production for TV5, organizing events for state agencies and enterprises, rental fee from its properties, and dividend from its investments.
It encountered a financial loss of 965 million baht in 2022. TV5 has reported financial losses for the past six years due to declining commercial advertisements, technology disruption, and cut-throat competition in the media industry.
The two multiplexer transmission systems, carrying digital signals to 14 TV stations, generated nearly a billion baht revenue per annum for TV5, according to an official who testified before the committee.
Despite not being financially viable, TV5 deputy director Tavinan Kongkran told the committee that the Army needed the network for security purposes, rather than profit making. TV5’s broadcast content concerning security and military affairs were only 15 per cent of total airtime, while the rest was entertainment, sport and variety shows.
Jirayu Huangsab, chairman of the committee and a Pheu Thai Party MP, told local media that the government might not transfer the TV network from the Army to another agency but it needed to transform it into other forms to reduce the financial burden.
Members of the committee from the opposition Move Forward Party wanted the Army to clear its status and relations between TV5 and RTA Enterprise, as well as their respective financial situation.
By Thai PBS World’s Political Desk
