4 Oct 2006

Thai police to investigate Shin-Temasek deal

- UPDATE
10.03.2006, 05:50 AM

BANGKOK (XFN-ASIA) - Thailand's commerce ministry said it has asked police to investigate the 73.3 bln baht sale of top telecoms company Shin Corp to a group led by Singapore's Temasek Holdings by the family of ousted premier Thaksin Shinawatra.

Under the tax-free deal, which sparked the crisis leading up to last month's coup, Thaksin's family sold its 49.6 pct stake in Shin Corp, the telecom giant the premier founded before entering politics, to Temasek in January.

An anti-corruption panel set up by the military, which ousted Thaksin in a bloodless coup on September 19, is looking into whether his family wrongly avoided paying tax on the sale.

The commerce ministry, which launched its own probe into the Shin Corp-Temasek deal before the putsch, said it had decided to seek police investigation based on the findings of its internal review.

'We submitted the case to the police on September 28 to investigate alleged violations of foreign ownership rules,' said a ministry official who declined to be named.

'It depends on the findings but the police could bring the case to court.'

Lieutenant Colonel Songyos Thawandamrongkit said police are 'examining the documents,' but he stopped short of saying when they would launch the investigation.

Under Thai rules, foreign investors can own up to 49 pct in Thai telecom companies but the question is whether other local entities acted on Temasek's behalf.

Pichai Lertsupongkit, an economist at Prudential Siam Securities, said the probe would likely go to the court and if found guilty, Temasek, Singapore's state-linked investment firm, might have to return stakes to Thai investors.

A spokeswoman for Shin Corp declined to comment.

A Temasek executive told Newsweek magazine last month that the company complied with all laws and regulations in Thailand when it took over Shin Corp.

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


1 comment:

lee hsien tau said...

One thing we can conclude from the General Sonthi Boonyaratglin led coup de tat is:

PAP won't splinter when the old man dies. PAP will only splinter when an outside event forces the PAP out of power.