March 22, 2007
TEMASEK Holdings has put its plan to sell some shares in Shin Corp on hold pending an investigation into whether the Singapore firm broke Thai foreign ownership laws, financial sources said on Thursday, March 22.
"Nothing will happen for at least 60 days," said one source who declined to be identified, referring to the timeframe police set for delivering their findings on the case to prosecutors.
National police chief General Sereepisut Taemeeyavas said on Tuesday he believed Temasek broke Thai laws when it acquired the Shin Corp telecoms group for $3.8 billion last year.
Police have been investigating the case since a Commerce Ministry probe found last year that Temasek may have overstepped Thai laws by using "nominee" shareholders to skirt a 49 percent limit on foreign ownership.
The key question is whether Kularb Kaew, controlled by a Malaysia-based Thai, Surin Upatakul, who was a partner in the takeover, is a Thai company or a Temasek nominee.
Surin and three others involved in the deal failed to show up for a meeting with police on Monday, Seereepisut said.
Temasek, which has denied any wrongdoing, had been expected to announce plans this month to dilute its holdings in Shin Corp in a move to defuse political tension over the purchase and reduce losses on Shin Corp shares.
Temasek has been in talks with Thai investors about selling some Shin Corp shares with Goldman Sachs as its advisor and SCB Securities and Tisco Securities potential underwriters, another source close to the deal said.
"They had been informed to be ready to execute the share sale. But it is on hold now after Seereepisut comments," the source said.
Temasek would announce plans to restructure the management of Shin Corp this month and Somprasong Boonyachai, chairman of Shin's mobile unit Advanced Info Service , was expected to be appointed Shin Corp's executive chairman, the source said.
Somprasong, now vice chairman of Shin Corp, would replace Boonklee Plangsiri, who was likely to stay on as a Shin Corp director, the source said.
Boonklee, 54, seen as a right-hand man of ousted Prime Minister Thaksin Shinawatra, has kept a low profile since Thaksin's family sold its controlling stake in Shin Corp to Temasek for $1.9 billion early last year.
The deal has come under intense scrutiny in Thailand since a bloodless coup ousted Thaksin, who founded Shin Corp, in September.
Shin Corp's 53-percent-owned television channel ITV was seized by the army-installed government earlier this month after a prolonged legal battle over unpaid fees and fines.
It is also at the centre of a diplomatic spat between the two Southeast Asian nations after coup leader General Sonthi Boonyaratglin said he wanted the four Shin satellites back under Thai control as a matter of national security.
Temasek controls Shin Corp through holdings in two Thai-registered companies, which together own more than 96 percent of Shin, now valued at $2.4 billion on the Thai bourse.
Shin Corp shares were untraded on Thursday, when the main index was up 0.41 percent at 0448 GMT, and closed at 24.50 baht on Wednesday. ($1 = 34.66 baht)