Former Thai Airways Chairman Faces Corruption Charges

Thanong Biday, the former Thai finance minister and ex-chairman of Thai Airways International (TG, Bangkok Suvarnabhumi), appeared in a Bangkok court on September 25, 2024, to face serious corruption charges. The case stems from allegations made by the National Anti-Corruption Commission (NACC), which claims that Thanong breached the State Employees Offences Act during his tenure related to a controversial Rolls-Royce engine deal.

Joining him in court was Kaweepan Ruengpaka, the former finance deputy director of the state-owned airline. In an administrative hearing, both men were released on bail and barred from leaving the country while the legal proceedings continue.

The origins of the charges trace back to a decade-long investigation conducted by the UK’s Serious Fraud Office (SFO). The investigation revealed that Rolls-Royce admitted to making various payments to secure an order for Trent 800 engines for six Boeing 777s and seven Airbus A340s. According to the Bangkok Post, these illicit transactions occurred between 1991 and 2005, involving approximately USD 36.3 million paid to “regional intermediaries,” including government officials and employees of Thai Airways. The findings of the SFO prompted the NACC to initiate a local investigation, ultimately leading to the charges against Thanong and Kaweepan.

Thanong was appointed to the board of Thai Airways in May 2001 and became chairman in June 2002. At the same time, Kaweepan served as the airline’s deputy managing director of finance and accounting. It is alleged that both individuals had the authority to prepare, review, and approve the airline’s 2005/06 and 2009/10 Enterprise Plans, which included significant orders for aircraft and engines.

The NACC claims that Thanong misused his position to ensure that only aircraft certified for Rolls-Royce engines were considered for procurement, despite previous issues Thai Airways had encountered with the engines, their high costs, and the limited availability of certified local maintenance, repair, and operations (MRO) providers.

Additionally, it is alleged that the two executives altered an engine order for the Boeing 777 from Trent 884s, with a maximum take-off weight of 580,000 pounds (263,084 kg), to Trent 892 engines with a maximum take-off weight of 650,000 pounds (294,835 kg) without board approval. This decision reportedly led to increased costs for both the aircraft and engines, benefiting the suppliers while harming the airline’s financial standing. The enterprise plans aimed to acquire 14 aircraft with a budget of THB 96.355 billion (approximately USD 2.99 billion). The NACC alleges that their actions resulted in an excess cost to Thai Airways of THB 1,865,140,094 (about USD 57.85 million).

The case is set to return to court for a plea hearing on October 7, 2024. The outcome of this case could have significant implications for both individuals and Thai Airways, highlighting ongoing concerns about corruption in the aviation sector in Thailand. As the legal proceedings unfold, the focus remains on the integrity of procurement practices and accountability within state-owned enterprises.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com