Some Thai leaders hint at legal bid to seize satellites

The Straits Times, March 5, 2007
By Nirmal Ghosh, THAILAND CORRESPONDENT



BANGKOK - EVEN as some Thai leaders have given assurances that the government will not seize Shin Corp subsidiary ShinSat's satellites, others having been signalling that a legal process could do exactly that.

At the urging of Prime Minister Surayud Chulanont, Thailand's Department of Special Investigation may take over a police inquiry into Kularb Kaew this week to establish whether the Thai company is a nominee through which Singapore's Temasek Holdings controls Shin Corp.

The concessions could be revoked if Temasek was found to have used nominees to buy Shin Corp, Information and Communications Technology Minister Sitthichai Pookaiyaudom said last week.

'We have to determine first whether Kularb Kaew is a nominee. If the company is proved to be a nominee, we can take back our concession,' he said.

Reporting Mr Sitthichai's comments, the Thai Rath daily wrote: 'If Kularb Kaew is really foreign owned, the problem will end, and we can get back the national assets.'

The use of nominee companies is an illegal, but so far widely condoned, way for foreign companies to get around rules limiting foreign ownership of Thai companies.

A legal ruling on Kularb Kaew will serve to clear the air over the satellites, which many Thais view as strategic national assets now in the hands of foreigners.

The satellites are state property operated by ShinSat under concessions expiring in 2021.

Shin Corp owns 41.3 per cent of ShinSat, while the remainder is owned by the Thai public, including around 16,000 individual and institutional investors. Thai law limits foreign shareholding in the telecom sector to 49 per cent.

Given ShinSat's pattern of share-holding, say analysts, ShinSat may not be deemed a foreign-controlled firm even if Kularb Kaew is found to be a nominee.

The Kularb Kaew investigation is only one of the multi-pronged effort to resolve the Shin Corp issue, which sparked controversy in January last year when Temasek bought the stake in the company owned by former prime minister Thaksin Shinawatra's family.

The ICT Ministry is examining technical issues, while the Justice Minister last week set up a panel to examine legal issues surrounding ShinSat's concessions.

For its own credibility with the public at a time of rising nationalist sentiment, the government must show it has moved on the Shin Corp issue, but it also cannot afford to upset foreign investors.

Hence the search for middle ground - a buyout of ShinSat, or possibly even Shin Corp.

Mr Sitthichai said last week officials were informally talking to Temasek on the buyout option.

'Temasek representatives indicated that if they can get a good price, they might sell it back. But everything depends on the agreement,' he told journalists.