THAILAND

A proposal to cut the government's stakes in PTT Plc and Thai Airways could hurt the administration's image in the global financial markets, former finance minister Thirachai Phuvanatnaranubala has warned.

Mr Thirachai, who lost his job in this week's cabinet reshuffle, yesterday said investors could view the effort to lower the government shareholdings in the two firms as a veiled attempt to manipulate the country's public debt figures.

On Tuesday, Virabongsa Ramangkura, chairman of the Strategic Committee for Reconstruction and Future Development, said the government may sell a two per cent stake in PTT in an effort to shift the company's debt from the public debt record.

PTT, now 51 per cent held by the government, reported liabilities of 756 billion baht at the end of September. National carrier THAI is also 51 per cent held by the Finance Ministry, with debt of 208 billion baht at the end of September.

Liabilities for the two state enterprises are counted in the public debt figures, which stood at 4.28 trillion baht at the end of September.

"Greece is one example of a country that tried to camouflage its public debt. Once the market loses confidence, it takes time for it to return," Mr Thirachai said.

Mr Thirachai is a former central banker and securities regulator.

He urged Kittiratt Na-Ranong, who moved from the commerce portfolio to become the new finance minister, to try to get on well with economic agencies, particularly the Bank of Thailand. "In working with the central bank, one must maintain respect and be open to different views," he said.