Temasek setback as Thai prince disowns ex-aide

October 31, 2006
Singapore Democrats

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John Burton & William Barnes
Financial Times
30 Oct 06

Temasek Holdings, the Singapore state investment company, has suffered an embarrassing setback in Thailand after a former royal aide whom it hired as a corporate adviser was disowned by the Thai crown prince.

Temasek had recently hired Tongnoi Tongyai, who was described as a royal counsellor to Crown Prince Vajiralongkorn, to help head its new office in Bangkok.

Temasek is under investigation by local authorities over its US$3.8 billion takeover this year of Shin Corp, the Thai telecoms and media group, for allegedly breaching foreign ownership limits in strategic industries.

But Mr Tongnoi’s appointment was abruptly cancelled by Temasek last week by mutual agreement.

In a statement at the weekend, the crown prince’s office said that Mr Tongnoi had allegedly misrepresented his credentials to Temasek “to establish influence for his own business benefit”.

The statement was triggered by speculation that Mr Tongnoi might have been hired by Temasek to cultivate close ties with the crown prince, the most powerful figure in Thailand after his father, the king.

Mr Tongnoi’s “acts have caused misunderstanding among the public and caused damage to the HRH crown prince’s personal office”, it said. “The office thus decided to explain and announce these facts to the public.”

Mr Tongnoi’s claims of being a personal adviser to the crown prince “have caused damage not only to the country but also instability for international investment in Thailand”, the crown prince’s office added, saying his duties had been “translating and drafting English documents and occasionally writing letters”.

Temasek did not respond to a request for comment. Mr Tongnoi could not be reached for comment.

Temasek has been criticised for underestimating the political impact of its purchase of Shin Corp from the family of Thaksin Shinawatra, the former Thai prime minister, in January. The deal sparked protests against Mr Thaksin and led to his overthrow in a military coup in September.

Surayud Chulanont, Thailand’s new interim prime minister, pointedly skipped Singapore during a recent tour of south-east Asian capitals.

The episode could increase pressure on Temasek to halve its estimated 96 per cent stake in Shin Corp to avoid threatened legal action against it by Thai authorities.

Analysts in Bangkok say that Temasek has been trying to gauge the political climate in Thailand. Shin Corp’s share price has fallen 31 per cent since the deal was concluded.

“This is now very political. Does the government really want to upset Singapore? There are many ways of slicing this and I think they are all being explored right now,” said Andrew Yates, head of institutional sales at Merchant Partners in Bangkok.