Charoen Sirivadhanabhakdi

Charoen Sirivadhanabhakdi
Born 2 May 1954
Residence Bangkok, Thailand
Nationality Thai
Occupation Chairman, ThaiBev and Fraser & Neave
Net worth $12.2 billion[1]
Children 5

Charoen Sirivadhanabhakdi (Thai: เจริญ สิริวัฒนภักดี; rtgs: Charoen Siriwatthanaphakdi; born 2 May 1954) is a Thai business magnate and investor. He is Thailand's third richest entrepreneur, with an estimated net worth of US$12.2 billion.[1][2] He is chairman of Thai Beverage as well as Fraser & Neave Ltd.[3] He owns the Pantip Plaza mall in Bangkok, Hotel Plaza Athenee in Manhattan, hotels in Asia, the US and Australia, plus residential, commercial and retail buildings in Singapore and Thailand.[4]

Background

Like most of Thailand's tycoons, Charoen is ethnic Chinese. He is the sixth of 11 children of a poor street vendor who migrated to Bangkok from southern China. He left school early, at the age of nine, to work.[2]

To this day Charoen speaks Teochew, his native Chinese dialect, as well as Thai.[2]

Business career

Charoen started supplying to distilleries producing the local Thai whiskey, which were a state-run monopoly at the time. Through the contacts he made, he acquired a licence to produce his own alcoholic drinks.[2] All liquor production was state-owned at the time, and Charoen was able to get rights to 15% of the market.

In 1985, the remaining 85% of state licenses were opened to bids. Charoen was able to take out a US$200 million loan using his large stocks of alcohol as collateral and soon after won 100% of the concessions. With such a monopoly, Charoen's beverage companies were able to return $550 million in royalties to Thailand’s excise department in 1987, 5% of the national budget at the time.[5]

In 1991 Charoen teamed up with the Danish brewer Carlsberg to tap into Thailand's growing beer market, at the time dominated by the 60-year-old Boon Rawd Brewery which made Singha beer. Three years later, based on what he had learned from Carlsberg, he began making his own beer, branded Chang (Thai for 'elephant'). Within five years, Chang had captured 60% of the local market share. Completely eclipsed, in 2003 Carlsberg pulled out of the joint venture. Charoen then successfully sued the Danish company, winning US$120 million in 2005.[2][6]

Since the early 2000s, Charoen has successfully been able to branch out into property development through the creation of TCC Land Co Ltd. The company is now one of the largest property developers in Thailand, investing in and developing residential, hospitality and retail sites, as well as engaging in property management, logistics, agro-business, and several property funds in Thailand and Singapore. Since its formal establishment, TCC Land’s developments have been primarily focused on Thailand, and indeed the Sirivadhanabhakdi family is now the largest landlord in the country, controlling 630,000 rai of land as of June 2014 – over three times more than Thailand’s second largest landowner, and approximately 21 times more than that owned by the royal family's Crown Property Bureau.[7] TCC Land also has several overseas properties that are managed by TCC Land International Co Ltd, including interests in the US, UK, Australia, Japan, the PRC and several South East Asian countries.

In early 2013, Charoen won a bidding war for Singapore's Fraser & Neave Ltd. which has properties throughout Asia as well as soft-drinks operations, with debt accounting for most of the US$11.2 billion price tag. He received financing to back the deal, the largest merger-and-acquisition transaction introduced in Asia in 2012, from a group of banks including United Overseas Bank Ltd. of Singapore and DBS Bank Ltd.[8] The total number of F&N shares owned by Charoen's group - TCC Assets and Thai Beverage - amounts to 1.19 billion, representing an approximate 82.59-per-cent stake, as of February 14.[9]

Family

His wife is Khunying Wanna.[10]

He has five children.[4] His son, Thapana Sirivadhanabhakdi, is now the chief executive officer at ThaiBev and his daughter Wallapa is executive director of TCC Land, the property arm.[2] His youngest son, Panote Sirivadhanabhakdi, is a member of the board executive committee of F&N.[9]

Recognition

His real name is Khun Charoen. In 1988 the King of Thailand granted the family the name “Sirivadhanabhakdi”.[10]

Sirivadhanabhakdi has received various honors and Thai royal decorations such as:

Sirivadhanabhakdi holds:

Allegations of Abuse of Political Connections

Links to Former Prime Minister of Thailand

Prem Tinsulanonda, the former military general and prime minister of Thailand who sat on ThaiBev’s board of directors in the early 2000s, helped rescue Charoen’s Surathip Group, the distributor of Chang beer, in 1986. The company at the time owed THB 14 billion (approximately US$450 million) to banks and THB 6 billion (approximately $190 million) to the state before Tinsulanonda reportedly stepped in to help the company gain a monopoly over the liquor industry by restructuring contracts to reduce annual “burdens”.[12] Chang was also reportedly classified as an “economy brand”, which meant a lower excise tax.[13]

Protection of Business Interests

Since the Asian financial crisis of 1997 and attempts to further liberalize Thailand’s competition laws in 1999, Charoen has on occasion been able to use his political connections to increase his dominance over the country’s alcohol industry.

Charoen reportedly launched a campaign of resistance against the liberalisation of the local whisky market in the late 1990s and early 2000s. He was reportedly able to do this due to his increasing clout since the Asian financial crisis, which saw him rescue hundreds of politically connected, debt-ridden Thai companies and projects. This includes the acquisition of the large Bangkok IT shopping mall Pantip Plaza from Chalermchai Vaseenont, who set regulations for the local liquor industry in his capacity as a former director general of the country’s excise department at the Ministry of Finance.

Charoen’s assistance has brought certain “bureaucratic paybacks”. For example, following the liberalization of the Thai market, the government implemented several tough new environmental regulations for the construction of new plants, making it very difficult for new rivals to enter the liquor market. Charoen was able to avoid these new regulations as he had won all 12 bids for the previously government-held distilleries it ran on concession.

His assistance during the financial crisis has also reportedly brought him some level of protection from media criticism: a programme on a military-controlled radio station was, for example, allegedly taken off the air after it ran an unflattering report on Charoen that included allegations of tax evasion.

Several competitors have protested against some of Charoen’s activities. Boon Rawd Brewery, the producer of the Singha beer brand, complained to Thailand’s Fair Trade Department in October 2000 about Charoen’s dumping of cheap products on the market, which the company claimed impeded competition. Charoen was warned that his actions were “inappropriate”; however, the department eventually ruled in his favour after claiming that no law had been violated as regulations regarding the issue had not yet been finalised. Thailand’s Commerce Minister allegedly did not participate in the deliberations and the details of the decision-making process have never been made public.[14]

References

  1. ↑ 1.0 1.1 "Charoen Sirivadhanabhakdi". Forbes. Retrieved 2 January 2015.
  2. ↑ 2.0 2.1 2.2 2.3 2.4 2.5 Thai whiskey tycoon Charoen takes over Fraser and Neave
  3. ↑ Charoen appointed F&N chairman
  4. ↑ 4.0 4.1 Top 10 richest Chinese in the world
  5. ↑ http://www.forbes.com/forbes/2005/0328/028a.html Forbes, March 2005
  6. ↑ Thai Billionaire Already Winning in Tussle With Heineken: Retail
  7. ↑ http://www.bangkokpost.com/news/local/416020/charoen-owns-most-land The Bangkok Post, June 2014
  8. ↑ Thailand's Charoen Heads Toward Takeover Fight
  9. ↑ 9.0 9.1 Charoen puts youngest son on F&N board
  10. ↑ 10.0 10.1 TCC website
  11. ↑ 11.0 11.1 Executive Profile on Businessweek
  12. ↑ http://r-center.grips.ac.jp/gallery/docs/13-26.pdf, Coalition Politics and Reform Dynamics in Thailand February 2014
  13. ↑ http://www.forbes.com/sites/simonmontlake/2013/11/22/bottoms-up/ Forbes December 2013
  14. ↑ http://www.wallstreet-online.de/diskussion/500-beitraege/305927-501-1000/waste-or-make-money-in-thailand The Wall Street Journal March 2001