A former Thai finance minister and ex-chairman of Thai Airways International (TG, Bangkok Suvarnabhumi) fronted court in Bangkok last week on historical corruption charges. Thanong Biday appeared before the Criminal Court for Corruption and Misconduct Cases on September 25 following a referral by the National Anti-Corruption Commission (NACC) which alleges he breached the country's State Employees Offences Act while chairman in relation to a Rolls-Royce engine deal.
Also facing court was Kaweepan Ruengpaka, the state-owned airline's former finance deputy director. In what was an administrative hearing, both gentlemen were released on bail and barred from leaving the country.
The charges stem from an investigation by the UK's Serious Fraud Office last decade in which Rolls Royce, among other things, admitted paying various individuals to help it win an order for Trent 800 engines for six B777s and seven A340s. The Bangkok Post reported that the bribery took place between 1991 and 2005 and involved payments totalling about USD36.3 million to "regional intermediaries" including then Thai government and Thai Airways employees. The SFO investigation and subsequent UK court proceedings sparked a local investigation by the NACC, which ultimately zeroed in on Thanong and Kaweepan. ch-aviation does not say the allegations are true, only that both men are charged with corruption offences.
Thanong was appointed a director of Thai Airways in May 2001 and its chairman in June 2002. At around the same time, Kaweepan served as the carrier's deputy managing director of finance and accounting. It is alleged the pair had the authority to prepare, consider, and approve the 2005/06 and 2009/10 Thai Airways Enterprise Plans, which included ordering six B777-200ERs and seven A340-500/A340-600s, plus the appropriate Rolls Royce Trent engines.
It is further alleged the chairman used his position of authority to ensure only aircraft certified to use Rolls Royce engines went onto the selection shortlist, despite Thai Airways having previously encountered problems with Rolls Royce engines, the high cost of the engines, and limited local MRO operators certified for the type.
Among other things, the NACC says both men changed a B777 engine order for Trent 884s with a maximum take-off weight of 580,000 pounds (263,084 kgs) to Trent 892 engines with a maximum take-off weight of 650,000 pounds (294,835 kgs) without running it past the board, resulting in the price of both the aircraft and engines increasing, to the benefit of the suppliers and the detriment of the airline. The enterprise plans envisaged ordering 14 aircraft and budgeted THB96.355 billion baht (USD2.99 billion). It is alleged Thanong and Kaweepan, by subverting the acquisition process, cost the airline an extra TBH1,865,140,094 (USD57.85 million).
The matter returns to court for a plea hearing on October 7.
