Anand outlines ties to group of giants

March 7, 2001

FORMER prime minister Anand Panyarachun and current prime minister, telecom tycoon Thaksin Shinawatra, feature among the likes of George Bush, James Baker III, John Major and Fidel Ramos as noted advisers to the Washington-based Carlyle Group, a US$12 billion (Bt522 billion) private equity firm.

Anand told The Nation yesterday that he joined the Carlyle Group about two years ago at the invitation of former US President George Bush, whom he has known for about 30 years since the time they both served as ambassadors to the United Nations.

Anand still sits on the Carlyle Group's advisory board for Asia-Pacific, formed two years ago to advise the firm about political, economic and business prospects in this part of the world, while Thaksin is understood to have tendered his resignation from the same board upon becoming prime minister.

"As a member of the advisory board, I am not supposed to get involved in operations. I just give out advice when we meet to discuss about the economic or business opportunities in the region," Anand said.

Formed in 1987, the Carlyle Group, chaired by Frank Carlucci, secretary of defence in former President Ronald Reagan's administration, has invested more than $5.3 billion of equity in 200 corporate and real estate transactions with an aggregate acquisition value of more than $14 billion. As of December last year, the firm had more than $12 billion of capital under management.

The advisory board meets only once a year. The first parley, which Bush also attended, was held in Bangkok at the Oriental Hotel in 1999. Last year, the advisory board members assembled in Seoul. The board meets next in May in Hong Kong.

"I understand that the Carlyle Group has not yet made any investments in Thailand. But I heard that they have invested in a bank in Korea and a telecom firm in Taiwan," Anand said.

In its March 6 edition, the International Herald Tribune played up the political connections of the Carlyle Group in a front-page article, reporting that the firm has benefited from extensive contacts with numerous former government officials, principally in the Reagan and the senior Bush administrations.

Leslie Wayne of the New York Times, which together with the Washington Post publishes the Tribune, wrote the report, investigating how top-level government officials have helped turn Carlyle Group into a moneymaking machine. "In a new spin on Washington's revolving door between business and government, where lobbying by former officials is restricted but soliciting investments is not, Carlyle has upped the ante and taken the practice global," the reporter wrote.

Referring to Bush and Baker as the star powers of Carlyle Group, Wayne added: "With door-openers of this calibre, along with shrewd investment skills, Carlyle has gone from an unknown in the world of private equity to one of its biggest players."

Bush helped Carlyle Group win a deal for control of KorAm Bank, one of the few healthy banks in Korea.

In April 1998, while Thailand was still mired in a deep economic morass, Thaksin tried to use his American connections to boost his political image just as he was forming his Thai Rak Thai Party. He invited Bush senior to visit Bangkok and his home, saying his own mission was to act as a "national matchmaker" between the US equity fund and Thai businesses. In March, he also played host to James Baker III, the US secretary of state in the senior Bush administration, on his sojourn in Thailand.

"I'm just trying to be a matchmaker for those who want to invest in Thailand," Thaksin said in the April 24, 1998 edition of The Nation. "Every company needs to increase capital now and what our country needs most is capital and we want to sell our products."

At the first meeting of the advisory board, Asia-Pacific, in Bangkok on May 30, 1999, Bush gushed reassuring remarks about the promising prospects of the Thai economic recovery. "South Korea has recovered. Thailand is going to make it, I am sure," Bush said.

At the time, the Carlyle Group said it planned to create a $1-billion fund to invest in Southeast Asia, hoping to ride on the crest of the economic recovery. Its fund managers were busy holding talks with a number of Thai companies over possible investments. It was reported then that the Carlyle Group was looking towards investing $500 million in the steel, services and energy industries in Thailand.

Thaksin was quoted then as saying that the main obstacle to the Thai recovery was "the Thai owners' reluctance to part with their equity holdings in spite of the financial crisis".

In May 1999 the Carlyle Group joined five other companies, including Hongkong and Shanghai Banking Corporation, General Electric Capital Services, Newbridge Asia and American Asset Acquisition Corp, to bid for troubled Siam City Bank. The group backed off after of SCIB's assets had deteriorated appreciably.

BY THANONG KHANTHONG