Thailand sets up special panel to prove Temasek-Shin deal

November 17, 2006
Singapore Democrats

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AFP
16 Nov 06
http://au.news.yahoo.com/061116/19/11g6h.html


Thai police have said a special panel will next week begin looking at possible violations of foreign ownership laws in the purchase of Thai telecom Shin Corp by Singapore’s Temasek Holdings.

The new police panel will examine a Commerce Ministry review of the purchase, which found that Temasek may have violated rules that limit foreign companies to holding 49 percent of telecoms.

“The team will have its first meeting next week to see what information we have received and who was involved in the case,” said police Major General Vichien Singpreecha, who heads the panel.

“Our officials are looking at the details of the allegations without any (political) pressure,” he told AFP.

The case could force Temasek to shed some of its stake in company, and is loaded with political and economic consequences for Thailand.

Shin Corp was founded by deposed prime minister Thaksin Shinawatra, who was ousted in a bloodless coup on September 19.

His family sold their 49-percent stake in the company to Temasek for 1.9 billion dollars in a tax-free deal that sparked months of street protests and political turmoil that led to the military takeover.

After the buyout of Shin, a Temasek-led group of investors increased its total stake to 96 percent through a mandatory offer for the outstanding shares.

Under Thai laws, foreigners are not allowed to own more than 49 percent of telecommunications companies.

Thailand’s post-coup government has vowed to investigate the deal, which both Temasek and Singapore officials have said complied with the law.

Last month, Temasek said in a statement that it would cut its stake in Shin “at the appropriate time and in an appropriate manner to maintain an orderly market.”

But the Bangkok Post newspaper said Thursday that Temasek would postpone its plan to dilute shares in Shin Corp until the military-backed government clarifies its interpretation of the foreign ownership rules.

“They have to put the plan on hold because potential buyers, who are still interested in buying Shin shares, want to see a clear picture on the investigation,” the English-language daily quoted a fund-management source as saying.

But Temasek’s representatives in Bangkok denied the report.

“What we can say is that there has been no progress so far regarding Temasek’s sales of Shin Corp shares,” a spokesman for Temasek’s Bangkok office told AFP.

Many foreign companies use similar structures to get around the foreign ownership limits, in a practice that has been widely accepted in Thailand for decades.