Thailand may try to buy ShinSat from Temasek

The Straits Times, February 20, 2007

By Nirmal Ghosh, THAILAND CORRESPONDENT


BANGKOK - THAILAND will try to buy back satellite operator ShinSat if it fails to prove that Singapore's Temasek Holdings broke the law when it bought a controlling stake in Thai telecoms giant Shin Corp last year.

Revealing this yesterday, Minister for Information and Communications Sitthichai Pookaiyaudom said that for now, his ministry is not allowing ShinSat to launch any more satellites. The ministry will also offer a new satellite concession to rival it.

Just over 41.3 per cent of ShinSat is owned by Shin Corp, the telecoms-based conglomerate previously owned by the family of Mr Thaksin Shinawatra, who was ousted as Prime Minister by a military coup last September.

His family sold its 49 per cent stake in Shin Corp to Temasek in January 2006, in a tax-free deal that catalysed anti-Thaksin sentiment.

The fact that Temasek, through Shin Corp, controlled ShinSat's broadcast and communications satellites Thaicom 1, 2 and 5 and iPSTAR, was cited as a security risk by Mr Thaksin's critics.

Last month coup leader and army chief General Sonthi Boonyarataglin alleged that Singapore could eavesdrop on the Thai military's conversations through its control of Shin Corp - which also dominates Thailand's mobile phone market through Advanced Info Service (AIS).

Last Friday, Gen Sonthi said plainly that he wanted the satellites back.

Singapore's Ministry of Foreign Affairs sought clarification over the weekend and, on Sunday, Gen Sonthi was asked by journalists about the implications for the relationship between the two countries.

He responded by saying his message was a call for patriotism aimed at Thais, not outsiders. 'It's purely a business deal. The Thaicom satellite can be sold and bought back,' he said.

'An asset of the Thai people is being used by another country and we just want it back. But by what means, remains to be seen.'

Another top general in the military Council for National Security, General Saprang Kalayanamitr, told The Straits Times yesterday he believed bilateral issues could be resolved.

'Thailand and Singapore have a long diplomatic relationship. The problem is only Thaksin's business deal, which has created tension,' he said.

'The mistake that Thaksin made can be resolved in a way that is fair to the Thai people.'

Noting that the two countries' armed forces had enjoyed a 'a very close relationship', he said: 'This business conflict can be resolved. The cause of the problem is Thaksin, not Singapore.'

An investigation launched is under way into the Shin-Temasek deal. One focus is whether Temasek breached foreign ownership limits through the use of nominees to control Shin Corp.

If that is proven, Mr Sitthichai said, it would mean Shin Corp has violated the terms of its concession.

If the probe fails to prove that, the government would consider offering 10 billion baht (S$450 million) to buy back ShinSat, or 100 billion baht to buy back Shin Corp, he said.