By TANALEE SMITH Associated Press Writer © 2006 The Associated Press
SINGAPORE — The Singapore state investment company that bought control of Thailand's Shin Corp. from its prime minister and his family earlier this year said Wednesday it is watching developments after he was ousted by a military coup and that it was premature to worry about any impact on the business transaction.
"It's a matter for the Thai people to resolve," Myrna Thomas, Temasek Holding's managing director for corporate affairs, said of the bloodless coup that ousted Prime Minister Thaksin Shinawatra on Tuesday night while he was in New York City for the U.N. General Assembly.
Thai army commander Gen. Sondhi Boonyaratkalin declared martial law and revoked the constitution. He announced he would act as prime minister for two weeks until a new leader "who is neutral and upholds democracy" is found, and that a post-coup interim government would retain power for no more than one year.
Asked whether there would be moves to confiscate Thaksin's vast assets, he told a news conference that "those who have committed wrongdoings have to be prosecuted according to the law."
Thaksin faced months of calls for his resignation over allegations of corruption and abuse of power. The opposition gained momentum in January when his family announced it had sold its 49.6 percent controlling stake in telecommunications company Shin Corp. to Temasek Holdings for a tax-free US$1.9 billion (euro1.5 billion). Critics allege the sale involved insider trading and complain a key national asset is now in foreign hands.
A tender offer for the remaining shares resulted in holding companies controlled by Temasek owning 96 percent of Shin Corp., sparking an investigation in August by Thailand's Commerce Ministry into whether Temasek breached the kingdom's limits on foreign ownership _ which could lead to the nullification of the sale.
The deal led to strong anti-Singapore sentiment among some in Thailand. Hundreds of Thais demonstrated outside the Singapore Embassy in Bangkok in March demanding Temasek abandon the sale, prompting Singapore to insist that the ties between the nations were strong and durable.
Temasek said in a statement Wednesday that it had complied with Thailand's laws and was "fully cooperating" with the Commerce Ministry.
A spokesman said the company was not worried about the coup's effect on the deal.
"At this stage it is quite premature to be concerned about the coup's effect on the Shin Corp. deal," a Temasek spokesman said on condition of anonymity.
Coup leader Sondhi told reporters that foreign policy and international agreements would not be changed.
In its annual review earlier this month, Temasek announced a net portfolio value of 129 billion Singapore dollars (US$82 billion; euro64 billion) at the end of March, up 24 percent from a year earlier.
Temasek has controlling stakes in several of Singapore's biggest companies, including Singapore Telecommunications Ltd. and Singapore Airlines Ltd. The company has been investing aggressively outside of Singapore in fast-growing economies such as India and China to diversify its portfolio. Its annual report noted S$21 billion (US$13.4 billion; euro10.4 billion) in new investments in the financial year ended in March.