No plan to prosecute Temasek: Thai Minister

The Straits Times, May 1, 2007


THE THAI government does not want Singapore's Temasek Holdings to be prosecuted even if it broke Thailand's foreign ownership laws when it bought a stake in Shin Corp.

In an interview with Dow Jones Newswires, Thai Information & Communications Technology Minister Sittichai Pokaiudom said: 'I'm not a prosecutor, but I don't want to upset the entire telecoms sector and this is also the view of the Prime Minister.

'Temasek must find a way to bring its shareholding to the level which is in line with the law, but the government won't pursue legal action on its part and Shin won't lose its (telecoms) concession.'

In January 2006, a consortium led by Temasek bought a controlling stake in Shin Corp for US$1.9 billion (S$3 billion) from the family of then Thai prime minister Thaksin Shinawatra.

Discontent over the deal - seen by many Thais as allowing a foreign company to control a key telecom company - contributed to the military-led coup and Mr Thakin's ouster in September.

Thai laws limit foreign ownership in telecommunications companies to 49 per cent.

Thailand's Commerce Ministry is investigating the nationality of Kularb Kaew, a holding company involved in the buyout.

The ministry said initial indications showed that Kularb Kaew was actually a Temasek nominee, meaning that the Singaporean company exceeded the foreign ownership limit.

The Shin Corp investigation is now being carried out by Thailand's Department of Special Investigations, a police branch, which is expected to give its findings by the middle of this month, Mr Sittichai said.

'The ruling will probably say that Kularb Kaew was indeed a Temasek nominee, so Temasek must act accordingly and cut its share in Shin,' Mr Sittichai said.

'I hope the Thai people will accept this settlement.'

Mr Sittichai's comments are in stark contrast to his stance in February.

He told Dow Jones Newswires then that the government was considering revoking Shin's telecoms concession and bringing the company back under Thai control if it was proven the Singapore investment company broke Thai foreign ownership laws.

ASSOCIATED PRESS