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Daniel Ten Kate
7 Feb 06
Growing anti-Singaporean sentiment relating to Temasek Holdings’ purchase of a 49.6-percent stake in Shin Corp could taint bilateral relations in the future, academics and lawmakers warned yesterday.
“The deal has raised negative attitudes toward Singapore in general,” Suchit Bunbongkarn, a political scientist at Chulalongkorn University and a former member of the Constitutional Court, told a seminar yesterday.
“We are quite lucky there are no protests against Singapore as the protesters are too busy trying to oust the prime minister. But we can’t think that the negative attitudes toward Singapore will be short-lived.”
Prime Minister Thaksin Shinawatra’s critics have blasted him for selling off Thailand’s “national assets” when his family took in 73.3 billion baht in the share transfer two weeks ago.
Concerns that Singapore has some ulterior motives in acquiring the company have been rather limited until now, though the seminar suggests that this could change in the coming weeks and months.
“It would be a surprise if Singapore Inc didn’t try to negotiate other benefits in the transaction, strategic benefits for Singapore in general,” said Korn Chatikavanij, deputy secretary-general of the Democrat party. Those benefits, he added, could include an exclusive 3G license for AIS and the use of Udon Thani province as a base for Singaporean fighter jets.
“There are too many unanswered questions and Singapore has remained noticeably quiet throughout,” Korn added.
Representatives from the Singapore embassy were invited to the seminar, but did not attend. A Singapore embassy spokesperson declined to comment on the proceedings or the Temasek acquisition.
Thaksin had said the family wanted to sell to a Thai buyer, but could not find one who could buy the shares. Temasek Holdings owns SingTel, one of the region’s largest cellphone providers, and previously held a 20-percent stake in AIS before the Shin takeover.
After the deal was announced, Defence Minister Gen Thammarak Isarangura Na Ayutthaya said safeguards were in place to make sure Singapore did not spy on Thailand using the three telecom satellites operated by Shin Satellite. Thaksin has defended the sale, saying that Shin Satellite only acts as an operator, while the government owns the concessions.
Fueling the anger over the sale was the Shinawatras’ flouting of the country’s foreign ownership laws. The Temasek deal went through on January 23, the first day an amendment to the Telecom Business Act came into effect that increased the limit on foreign ownership of telecommunication companies to 49 percent.
But through the creation of two holding companies – Aspen and Cedar – Temasek’s actual holdings in Shin Corp are closer to 88 percent. And though Thais own 51 percent of Cedar Holdings, the Singaporean-owned 49 percent holds preferred shares that give them nearly 10 times the voting power of the majority Thai owners.
“The company is legally Thai, but practically Singaporean,” Korn said. “Thai laws allow this to exist, but it’s clearly hypocritical.”
Though critics claim the deal may violate the spirit of the foreign ownership law, they also recognize that foreign competition may result in cheaper services for Thai consumers.
“The cellphone rates we paid were more than other people when there was a monopoly owned by Thais, and prices only fell when competition arrived,” said Korn, a former head of JP Morgan’s country operations. “The Thai public benefited from the entry of foreign competition. They were not getting a good deal when all the telecom companies were owned by Thais.”
Activists, Opposition attack Thai PM on all fronts
Activist groups and the opposition Democrat Party are staging a multi-pronged attack on the embattled prime minister with bids yesterday for criminal investigations and a censure debate over his family’s controversial tax-free share sale of Shin Corp.
Two advocacy groups filed a number of complaints yesterday calling on relevant agencies to investigate the suspicious link between Prime Minister Thaksin Shinawatra and Ample Rich Investments, an offshore venture located in the British Virgin Islands “tax haven”.
The Democrat Party said it is gathering support of at least 200 opposition and government MPs to endorse a censure motion against Thaksin as he has lost legitimacy to lead the country in light of his family’s contentious share deals.
The question of Thaksin’s involvement in the investment firm came to the fore following his family’s tax-free sale of Shin Corp. The transaction raised suspicions that the premier had business interests while holding office, which is an impeachable offence.
The Group for the Protection of People’s Rights and Liberties and the Confederation for Democracy submitted a joint petition to National Counter Corruption Commission urging graft proceedings against Thaksin.
The petition asked the anti-graft body to investigate whether Thaksin had concealed his Shin Corp shares in the offshore investment firm in order to doctor his asset-declaration statements filed in 2001, and later while in office.
During his first term as prime minister Thaksin was required to declare his wealth three times.
Weng Tojirakarn, chairman of the Confederation for Democracy, said he also filed a separate petition with the Department of Special Investigation (DSI).
He said the DSI should look into possible stock-exchange violations relating to the sale of Shin Corp.
Weng accused Thaksin of telling only part of the truth in arguing that the sale of his family’s vast telecom business allowed the buyer, Singa-pore’s Temasek Holdings, to gain control over state concessions but not over such properties as satellites, mobile-phone service infrastructure, and rights to broadcasting air space.
“Only Temasek has access to the concessions of operating these security-related properties, which in effect leads to an encroachment on Thai sovereignty,” Weng said.
He called on Senate Speaker Suchon Chaleekrua to expedite a judicial review of Thaksin’s involvement in the tax-free sale.
A petition for a Constitution Court inquiry into the matter was endorsed by a group of 28 senators and sent to Suchon.
In a related development, Pothipong Banluewong, a lecturer of Assumption University, filed a memo urging the Office of the Attorney General to investigate the transfer of Shin shares held by Thaksin’s two children.
Thaksin’s children reported to stock market regulators last August that they had a combined holding of 773.9 million Shin shares, he said.
Yet during the January 23 transaction the two Shinawatra heirs sold a total of 1.44 billion shares. Thus, state prosecutors should verify how the two had obtained additional shares, Pothipong said.
Meanwhile, Rossana Tositakul, an activist representative from the Consumer Federation, said the group plans to petition the Adminis-trative Court and other supervisory agencies for an investigation into the Shin deal. She said the deal could be illegal because it affects national security and the ownership of iTV, which operates a broadcasting concession.
Rossana said she was studying the procedure to file a case with the Court and was due to meet a group of lawyers today. “The contract is quite complicated. We want to see the actual contract that Temasek made with Shin Corp to see if we can buy back shares from Temasek,” she said.
“We have to file the case quickly – to order Temasek to freeze the shares before Temasek decides to sell Shin Corp shares to other companies. We are looking at the Egat model, on how the Court ordered the suspension of Egat’s initial-public-offering plan.”