Thai coup leader conciliatory
    toward Singapore

  International Herlad Tribune
June 28, 2007
Bloomberg News

A SINGAPORE investment in Thailand that fueled public protests culminating in the overthrow of Thaksin Shinawatra's government was not an effort at spying but "just business," Sondhi Boonyarataklin, the architect of last year's coup, acknowledged.

Sondhi also backed away from claims made earlier this year that Singapore could use the assets to spy on the military, saying the accusation was part of "a strategy speech to make Thai people feel more protective about the country's assets."

"I don't think they did anything wrong," Sondhi said in a recent interview. "We don't have any bad feelings on that. We still have a good relationship with Singapore."

Temasek Holdings, the Singapore government-owned investment company, last year bought control of mobile phone and satellite businesses from Thaksin and his family, who angered Thais by selling to foreigners and not paying tax on the proceeds.

A diplomatic spat erupted between the two neighbors, and Sondhi may now be trying to heal those divisions, said David Cohen, the director of economic forecasting at Action Economics in Singapore.

"Maybe he appreciates the value of a more conciliatory tone in terms of the appeal to investors," Cohen said. "Maybe they're ready to turn the page to the next chapter with the election coming. A more amiable environment will prove helpful to the economy as well."

Thailand's central bank and government are trying to revive spending by consumers and businesses. Confidence has been battered by a bungled attempt to impose capital controls and tougher foreign-ownership laws, coming amid mounting protests against the junta and administration installed after the coup.

Sondhi has pledged to restore democracy to Thailand through elections to be held as early as November. An index of business confidence is at the lowest in eight years and consumer confidence, after falling in 15 of the past 17 months, is at a five-year low.

"They must be frustrated with continued political turmoil that doesn't seem to be going away," Cohen said. "This is a good sign that he's taken a more conciliatory tone."

Temasek gained control of Advanced Info Service, Thailand's biggest mobile-phone company, and Shin Satellite, the country's only satellite operator.

Many Thais were concerned at Singapore's involvement in the transaction, even though Temasek and its parent, Singapore's Ministry of Finance, said the investment was a business decision and was not made at the direction of the city-state's government.

Temasek's chief executive officer, Ho Ching, is the wife of the Singapore prime minister, Lee Hsien Loong.

In February, Sondhi said he wanted to recover "national assets " including Shin's satellites.

"At this time, that issue is not our focus," Sondhi said this week at army headquarters in Bangkok.

"For national security, we want all of our communication systems that relate to the country's secrets to remain in the country," Sondhi said. "There is nothing personal against Singapore. We have military training with Singapore."

Temasek, in an emailed statement, declined to comment directly on Sondhi's remarks.

Thai military leaders, who call themselves the Council for National Security, have begun investigations into Thaksin, his family and members of his former cabinet for alleged violations in project approvals, share sales and other business deals.

The government plans to tighten foreign-ownership laws to prevent overseas investors from using Thai nominees to circumvent limits on control of local companies.

Prosecutors are investigating whether Temasek used nominees to gain control of more than the permitted 49 percent of Shin's satellite and mobile phone units.

A junta-installed committee this month froze about 62 billion baht, or $1.8 billion, in assets belonging to Thaksin and his family. The committee said it suspected that the accounts included funds from the Shin sale.

The investigations will not damage relations between the Southeast Asian countries, Sondhi said.

"We are not talking about the relationship between Singapore and Thailand," Sondhi said. "We are talking about the issue of national security. It's a different issue. Singapore is a country that I have visited the most often. Most of my foreign friends and colleagues are from Singapore."