Why did TPI Group collapse after the crisis? Why could it not effectively supervise increasing external debt? Table 22 illustrates the case of TPI and its affiliated companies by focusing on their ownership structure (pyramid structure) and management structure. At a glance, we find that the three brothers—Prachai, Prathip and Pramuwan— exclusively controlled all affiliated companies as chairmen, vice-chairmen, directors- cum-executives, CEOs and presidents. The Board members of almost all of the companies under TPI’s control overlapped with Executive Committee members of each company.
In the case of TPI PLC itself, the 20 Board members included two independent
directors, following exactly SET’s guideline, while Sunthon Hondaladarom (Finance Minister in 1959-1963 and 1963-1965) was invited to be its chairman. But when Prachai became CEO and vice-chairman and his two younger brothers also were appointed president and directors in 1988, TPI was put under the complete control of owner- family members. Independent directors or foreign advisors could not wield any power against the three brothers. Also, TPI did not disclose detailed information on its debt composition and investment plans. Thus, this type of family business may be designated as an authoritarian-type group under the control of a single person or a few owner-family members.
Carefully investigating collapsed business groups by focusing on their management structure, we can easily find similar patterns to TPI. These include Alphatec Group (semiconductor industry) led by Charn Assawachok (applied to the bankruptcy court in May 1998); the One Holding Group (finance) led by Pin Chakkapak (May 2000); the Bangkok Metropolitan Bank Group (a financial conglomerate) led by Udane Taechaphaibun (the Government took over in January 1998); the NTS Group (steel industry) led by Sawat Horunruang (September 2000); the Sino-Thai Group (construction
and engineering) led by Anuthin Chanwirakun (December 1999); the UCOM Group (telecommunications industry) led by Bunchai Bencharongkun; the Thanayong Group (property business) led by Khiri Kanchanapak; the TBI Group (textiles) led by Sukree Phothirattanangkun (May 2000), etc.