Thaksin helped pre-sale Shin (Did Temasek know this?)

May 11, 2007
Singapore Democrats

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Bangkok Post
10 May 07

Executive decree put it ahead of business rivals, raising its market price before Temasek bought it, investigators say

Deposed prime minister Thaksin Shinawatra is guilty of malfeasance for pushing legislation to impose excise tax on telecommunication businesses, the Assets Scrutiny Committee ruled yesterday.

ASC secretary Kaewsan Atipho said Mr Thaksin, as prime minister in 2003, pushed the executive decree that gave Shin Corp an advantage over competitors, and increased its market share.

The decree stipulates that existing telecom operators have to pay an excise tax of 10% on revenues for mobile phone operations, and 2% for fixed-line operations.

But it allows existing operators to deduct the amount from the concession fee, charged at 25% of total revenues, which they have to pay to state agencies.

Advanced Info Services (AIS), Shin Corp’s mobile phone operator, enjoyed an advantage over new operators, because the 1997 constitution required new operators to pay a 7% fee.

AIS was exempted because it was founded before the 1997 constitution was promulgated.

Hence the executive decree obstructed free competition in the telecom sector in violation of the spirit of the constitution which sought a free market, he said.

“The public was affected by this policy because there were fewer competitors,” said the former Bangkok senator. “Mr Thaksin’s motive of issuing this decree was to destroy the free [market in the] telecom sector.”

Mr Kaewsan said Mr Thaksin had a motive to be corrupt because 49% of Shin Corp shares were then held by his family.

“There was an increase in the Shin share value on the date the decree came into effect. This measure definitely benefitted the profit margin,” he said.

He said the total value of Shin Corp shares held by Mr Thaksin’s family members increased from about 20 billion baht to 73 billion baht in five years, when they sold the shares to Temasek Holdings.

This is corruption at policy level, and Mr Thaksin is guilty of malfeasance according to Article 157 of the Criminal Code, Mr Kaewsan said.

Issuing the executive decree was against the charter as well as the telecom business act, he said. State agencies lost about 50 billion baht in revenue as a result.

The ASC will bring charges against Mr Thaksin, and appoint an inquiry team to hear his defence against the charges by next week, Mr Kaewsan said