Nov. 17, 2016 5:30 a.m. ET
BANGKOK—Thailand’s crown prince won’t only succeed his father as king. He will also inherit the keys to one of the world’s largest royal fortunes.
The multibillion-dollar wealth of the Thai crown is rarely discussed in the country. Strict lèse-majesté laws, which criminalize any criticism of the monarchy, make many reluctant to study or debate the matter, especially now, just a month after the death of the long-reigning King Bhumibol Adulyadej on Oct. 13.
In the coming weeks, though, the fortune will pass into the control of an untested heir who has lived much of his life overseas. How Crown Prince Maha Vajiralongkorn administers it, and especially the investments in the Crown Property Bureau, is one of the most significant questions in a country where the ruling military junta has seized power twice in the past decade, in part to make sure the royal succession goes smoothly.
The crown’s assets and corporate holdings are valued at over $40 billion, according to one study, more than the wealth of Britain’s royal family or the rulers of Saudi Arabia. Its glittering royal regalia includes the world’s largest cut diamond, a golden conical crown and a fly whisk made from the tail hair of an albino elephant.
The Crown Property Bureau is held separately from the royal family’s much smaller but still substantial private wealth. After the military ended absolute royal rule in 1932, the new government created the bureau to support the Thai crown. Its establishment effectively made the Thai royals one of world’s few self-financing monarchies, though the state does pay for some of the monarchy’s expenses, notably security.
Under King Bhumibol’s 70-year-long reign, the bureau became a powerful cash-spinning conglomerate and one of the most influential levers in the Thai economy.
Its income increased from 563 million baht in 1987, worth $16 million today, to three billion baht, or $85 million, in 1997, according to an excerpt from a biography of King Bhumibol that the Crown Property Bureau published on its website.
Annual income has grown even more quickly in recent years and now totals more than $330 million, according to a 2015 study by Thai academic Porphant Ouyyanont. The same study valued the bureau’s assets at $43 billion.
Cornerstone assets include large stakes inSiam Commercial Bank PCL and industrial conglomerate Siam Cement PCL. Its landholdings encompass much of Bangkok’s most valuable real estate, including sites along the Chao Phraya River and a large plot next to a park that is the city’s equivalent to New York’s Central Park.
“The question of who controls the Crown Property Bureau and how its revenue is used goes to the heart of everything that goes on here,” said one Bangkok-based lawyer who has worked on deals involving the royal fund.
At times, some Thais have questioned how the bureau’s income should be used. In late 2014, for instance, the finance ministry said the bureau made a 200 million baht, or $5.64 million, divorce payment, to 64-year-old Prince Vajiralongkorn’s most recent spouse.
The Crown Property Bureau’s managers—trusted technocrats appointed by the king—say that the bureau’s primary purpose isn’t to make money—or at least not to make too much. Rather, they say, it is to enhance the monarchy’s prestige and support a wide cross-section of social programs.
The bureau over decades has provided nearly all its land outside Bangkok to farmers to tend as their own. Its income also funds many royal rural and agricultural development programs. The bureau’s first in-house property development—the $200 million Langsuan Village in one of the leafier parts of Bangkok’s central business district—is ostensibly meant to ensure the city has enough green space and trees.
“If we bid it out, the winner’s top priority would be to maximize their profits,” said the bureau’s silver-haired director, Chirayu Isarangkun Na Ayuthaya, at the launch ceremony in 2014. “That doesn’t fit with our objectives.” Mr. Chirayu is also now head of the Royal Household Bureau.
In recent years, the Crown Property Bureau’s managers have moved in a more commercial direction, entering a series of bold joint development projects.
In 2013, it auctioned off one riverside lot to a Thai company financed by China’s Export-Import Bank, which planned to build a $300 million riverside condominium and hotel complex. The following year, it auctioned one of the most valuable lots of land in Bangkok for an undisclosed sum to a consortium led by Thai liquor tycoon Charoen Sirivadhanabhakdi. He plans to build a mixed-use hotel, shopping and entertainment hub.
“The circle surrounding His Majesty wants to make as many connections and alliances as it can to strengthen the monarchy’s long-term position,” said one person familiar with the matter.
Yet the surge in development projects, combined with the secrecy surrounding the Crown Property Bureau, risks alienating many of the poorer Thais who were supposed to benefit from the bureau’s projects, said Sulak Sivaraksa, a Buddhist scholar and one of the few Thais who speaks openly about royal affairs.
Mr. Sulak has urged the Crown Property Bureau to open up its books to help answer questions about the royal family’s business interests and thereby strengthen its standing.
Write to James Hookway at firstname.lastname@example.org