In July, a Boeing 737 belonging to Thailand’s crown prince touched down at Munich airport. It was to stay there much longer than planned. The German authorities, when they realized who owned the aircraft, seized it in connection with a long-standing payment dispute between a failed German construction group, Walter Bau, and the Thai state, which insolvency administrators claim owes it more than €30 million – the reason the company went under in 2005.
The dispute dated back 20 years, to the construction of a road between Bangkok and its airport. Thailand never paid and the Thais have long since refused to respond to claims for the money.
The aircraft has since been released – so somebody has presumably paid surety – but the incident recalled a pre-Asian crisis, fast-and-loose era of bad governance and questionable creditworthiness, long gone. Or is it? How much has Asian governance really changed?
The accepted barometer of corporate governance standards is the Asian Corporate Governance Association and its CG watch publication, produced in conjunction with CLSA. "Corporate governance standards have improved over the past decade, but even the best Asian markets remain far from international best practice," began its 2010 report, bemoaning the fact that regulators make it too easy for companies to get away with box-ticking, markets lack effective rules on governance, and institutional investors generally don’t do enough to push for reform.
