17 Oct 06
Company issues statement that avoids nominee role; Korn calls it ‘ambiguous’
Temasek Holdings of Singapore yesterday broke its silence over its controversial holdings in Shin Corp, saying it was willing to reduce its shareholding “at the appropriate time and in an appropriate manner” to ensure an orderly market.
In a statement, Temasek’s senior managing director Jimmy Phoon said the share reduction plan was part of his company’s original intention, to maintain Shin Corp’s listing status on the Thai stock market following Temasek’s public tender offer in March.
He did not address the controversial question of whether Tema-sek relied on nominees to circumvent Thai foreign ownership laws in its Bt140-billion acquisition of Shin Corp, formerly controlled by the Shinawatra and Damapong families.
Temasek bought 49 per cent of Shin Corp from the Shinawatras and Damapongs in January this year before making a public tender for the remaining shares. In the tender offer, Temasek, through Cedar Hold-ings and Aspen Holdings, snapped up almost all of the shares of Shin Corp and ended up controlling 96 per cent of the Thai company.
The acquisition made Shin Corp shares illiquid for stock market trading. To revive active trading in Shin stocks, Temasek will have to observe stock exchange regulations by selling them back into the market, so at least 15 per cent are free-floating stocks.
“As a responsible investor, we also respect the views, and are sensitive to the feelings, of the Thai people,” Phoon said. “We want Shin Corp to remain a Thai company that Thailand and Thais will continue to be proud of. We are happy that Shin Corp continues to be managed by competent and professional Thai people.”
Phoon’s statement was released as a cautious response to the on-going controversy over Temasek’s alleged reliance on nominees to circumvent Thai foreign ownership laws, which fix a maximum foreign ownership of 49 per cent in a Thai business.
The Shin Corp deal has become fully politicised as it has involved ousted prime minister Thaksin Shinawatra, while Temasek is considered a Singapore state enterprise. The deal has also put Temasek’s business practices in the spotlight and has brought an awkward atmosphere to relations between Thailand and Singapore.
Last week, The Nation reported that a top-level official in Singapore had contacted Prime Minister Surayud Chulanont to request that the Shin Corp ownership problem be resolved in an amicable manner.
At the same time, a Government House official indicated that the Thai side would like to see Temasek reduce its holdings in Shin Corp to below 50 per cent to comply with the country’s foreign ownership laws.
Temasek’s statement yesterday made no attempt to get to the heart of the question of its Shin Corp ownership problem.
A source said Temasek was not in a position to say anything outright because there had been no official ruling, from either the Thai Commerce Ministry or the Supreme Administrative Court, that it had violated foreign ownership laws.
However, Phoon tried to create the impression that Temasek understood the sensitivities relating to the case.
Democrat Party deputy secretary-general Korn Chatikavanij said Temasek’s statement was ambiguous and could not be used to interpret plans for its next step.
Shin Corp controls mobile phone, satellite, TV broadcasting, a budget airline and other businesses. Korn has been calling for Temasek to explain in a straightforward manner its deal to acquire the Thai company.