ShinCorp/ShinSat

[Hitesh]

Shinee, Dtac and iTV join hands for I-News service
SIRIPHAN PONGTHANEE staff writer
Shinee, a website owned by Shin, Total Access Communication Plc (Dtac), and iTV, a subsidiary of Shin and Siam Commercial Bank Plc, join hands in launching the ‘I-News’ service which offers Dtac’s customers more media access choices, with the expectation of a 50 percent increase in existing customers’ subscriptions by the end of this year.
(Source: Business Day, September 17 2003).

FYI: Shinee and iTV are both owned by PM Thaksin Shinawarta's Shin Corp. which also owns AIS - DTac's biggest competitor.

[Tettyan]

So after months of speculation, it looks like this will become official very soon.

From my understanding, under SET rules, Temasek will have to tender for the remaining shares of Shin and AIS. But I thought the telecoms law only allows up to 49% of foreign ownership for cell phone companies. Also, I thought that there were foreign ownership restrictions on Shin Satellite and ITV. Any idea on how these issues will be resolved?

Also, I wonder what Shin's relationship with SingTel is going to be. The latter is 60% owned by Temasek, but under the US-S'pore FTA, Temasek will have to eventually sell off its majority stake in SingTel. Anyone have any clue?

Bravo to Thaksin though. He should have done this five years ago, before the market value of his holdings tripled under his regime. But better late than never. I suggest that he put the cash he gets from this deal into a blind trust, putting an end to any more potential conflicts of interest (similar to what Theresa Heinz Kerry did with her fortune). Somehow I doubt he'd ever contemplate this, but I'm open to being pleasantly surprised.


http://www.nationmultimedia.com/2006/01/20/headlines/index.php?news=headlines_19704296.html



HISTORIC TAKEOVER: Temasek boss flies in to seal Shin deal
The Nation
Published on January 20, 2006

SET to be advised today of Bt2.5-trln buyout by S’pore agency; BOT notes huge capital inflow. The chief executive of Singapore’s Temasek Holdings, Ho Ching, is to appear at a news conference on Monday to announce the takeover of Shin Corp Plc, according to a telecom industry source.

Ho made a one-day trip to Thailand yesterday to add a final touch to her organisation’s imminent takeover of the Thai conglomerate. Despite her Monday date with the media, the deal is expected to be notified to the Stock Exchange of Thailand today.

A source in Singapore said she had travelled to Bangkok yesterday and returned on the same day.

Regarded as one of Asia’s most influential women, Ho is the wife of Singapore Prime Minister Lee Hsien Loong. She is in charge of Temasek, which is the investment agency of the Singapore government. According to Temasek Review 2005, the company commanded an investment portfolio totalling S$103 billion (Bt2.47 trillion) last year, up 15 per cent from the previous year.

Temasek plans to acquire 49.6 per cent of Shin Corp’s shares from the Shinawatra and Damapong families, making the Bt76-billion takeover the largest deal in Thai corporate history.

Sources said Temasek and Shin Corp have agreed on a final price of about Bt51 per share. Shin Corp has 3 billion outstanding shares.

The recent strengthening of the baht against the US dollar has been attributed to the huge amount of foreign capital flowing into Thailand ahead of the takeover transaction, the central bank said yesterday.

Bank of Thailand Governor MR Pridiyathorn Devakula said the baht’s appreciation to a nine-month high of Bt39.4 to the dollar was due mainly to the inflow of foreign capital for the purchase of Shin shares.

It is for the purchase of Shin shares, he said. “There was a broker [associated with the Shin deal] selling [foreign] currency in the market. I just learned about it today, but I don’t know how much money is involved. I don’t know how many shares they’re going to sell.”

Temasek’s buy-out of Shin Corp is part of its investment expansion into Asia. Its wealth increased by S$8.1 billion in the financial year ending March 31, 2005, including S$2.5 billion from direct investments. The latter was driven by the portfolio shift into Asia.

Temasek’s investments span from telecom and media to financial services, property, and transportation and logistics.

Shin’s businesses include Thailand’s largest cell-phone operator, Advanced Info Service Plc, the satellite operator, Shin Satellite Plc, the free TV station, iTV Plc, the budget airline, Thai AirAsia, and the personal loan provider, Capital OK.

Temasek has more than a 60 per cent stake in Singapore Telecom, which owns almost 20 per cent of AIS. The takeover of Shin Corp will make Temasek and SingTel the largest shareholders in AIS, which is the cash cow of Shin Corp.

Thaksin has been quoted as telling his executives that his family will sell off Shin Corp as part of an exit strategy to end criticism of him and his family for having conflicts of interest.

According to Tisco Research, Shin’s operations are unlikely to change following the takeover.

SingTel, a subsidiary of Temasek, has been the Shin Group’s strategic partner for many years, especially in the case of AIS. The cooperation between the two has proven to be very successful and has contributed substantially to Shin becoming Thailand’s largest telecom conglomerate," Tisco said.

AIS is Thailand’s leading mobile phone operator, with a market share of nearly 55 per cent.

Tisco Research added: “Should Temasek become Shin’s parent we do not envision any major changes to the group’s operations. This would still be the case even if some of the Shin Group’s senior management decide to leave the company as Temasek and Singtel are both highly experienced operators of telecom businesses in their own right.”

Temasek will be obliged to tender for 100 per cent of the shares in Shin Corp to complete its takeover. It will have to set aside nearly US$4 billion (Bt157.4 billion) for this.

[GWR]

It'll be interesting to see if he invests some of it in 'At Samat' Corp.

[Wisarut]

Temasek holds 49% of Shin Corps Stocks while the rest would becovered by
Crown Property Bureau - investment Manager for Royal Family :rolleyes:

[Tettyan]

Temasek holds 49% of Shin Corps Stocks while the rest would becovered by
Crown Property Bureau - investment Manager for Royal Family :rolleyes:

Are you kidding? Or is this for real???

[Tettyan]

Are you kidding? Or is this for real???

I should have known better than to question you Wiz, guess you're always right.

This Reuters article certainly sheds a little more light than earlier reports, and their analysis seems to make a lot of sense. Much info at this stage is still speculation though - wonder how to seperate facts from all the rumors?

http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-01-19T194032Z_01_NOOTR_RTRJONC_0_India-232782-1.xml&archived=False


Thaksin share sale secret blown, deal appears done
Thu Jan 19, 2006 7:54 PM IST

By Khettiya Jittapong

BANGKOK (Reuters) - The family of Thai Prime Minister Thaksin Shinawatra will sell its controlling stake in the telecommunications empire he founded to Singapore's state investment firm, a senior banking source said on Thursday.

The source in Singapore, who is not involved in the deal, said Temasek Holdings would buy the 49 percent stake the Shinawatra and related Damapong families own in Shin Corp for "below 50 baht" per share.

Shin stock closed at 46.25 baht on Thursday and the deal was probably worth around $1.8 billion, market sources said.

The much rumoured sale of the stake in Thailand's biggest telcoms firm was confirmed earlier by Bank of Thailand Governor Pridiyathorn Devakula as he explained a sudden jump in the value of Thailand's baht currency against the dollar.

"We have not done anything. Its gain has been due to an inflow of funds for a Shin share deal," he said after the baht rose to 39.26 to the dollar, a 9-½ month high, in early trade.

"After the inflow, the baht moved normally in line with market forces," he said. By 1218 GMT, the baht had slipped back to 39.35 to the dollar.

The inflow of money meant the deal would be finalised very soon, an analyst at Capital Nomura Securities said. "Normally, money will come one day before the deal is announced," he said.

Pridiyathorn had simply confirmed a belief widespread in the market that the Shinawatra and Damapong families were close to finalising a deal with Temasek.

Shin Corp spokesmen have said almost daily for the past month they knew nothing about a deal and Thaksin has denied making an agreement with Temasek, the state investment firm, while on holiday in Singapore early this month.

"It is still the same. We have not yet been informed of anything by major shareholders," a Shin spokeswowan said on Thursday.

NO ONE CONVINCED

They have convinced almost nobody and some analysts said the delay of an announcement could be because Temasek was seeking a legal way to avoid a compulsory tender offer to buy the remaining shares in Shin and its listed affiliates.

A financial source said the Crown Property Bureau, which manages the Thai royal family's assets, might join Temasek in buying part of Shin Corp, which is capitalised at $3.5 billion on the Thai stock market.

"The bureau is interested in buying Shin Corp. They need a Thai name to prevent criticism that the families are selling a Thai company to foreigners," said the source, who declined to be identified.

The Crown Property Bureau director Chirayu Isarangkun said however, the bureau had no plan to buy a stake in Shin Corp. "The bureau has nothing to do with Shin Corp", he said.

But analysts said the Crown Property Bureau, which owns about 30 percent of Siam Cement PCL, Thailand's largest industrial conglomerate, could be a potential buyer.

Chumpol NaLamlieng, former chief executive of Siam Cement, is chairman of Singapore Telecommunications Ltd, which owns one-fifth of Advanced Info Service (AIS), the country's largest mobile phone firm under Shin Corp umbrella.

Temasek owns about 65 percent of SingTel.

Shin shares closed 1.0 percent lower on Thursday after investors shifted to property firm SC Asset Corp PCL, majority owned by Thaksin's family, dealers said.

SC Asset shares ended up 7 percent, having earlier gained as much as 15 percent, after Thai newspapers reported Thaksin's family intended to keep the company as its business spearhead.

Shin, a holding company which has more than 20 companies under its umbrella in the wireless, satellite and media sectors, would be a good target for a foreign firm wanting to get into the lucrative Thai mobile phone market, analysts say.

Shin owns 43 percent AIS, which has a 55 percent share of the domestic market.

Analysts say it is possible the Shinawatra family is considering moving into other businesses offering higher returns than a mobile phone market moving rapidly toward saturation.

A sale could also improve the image of Thaksin, often accused of shaping policy to suit Shin, charges he denies vehemently, as he fights opposition allegations of government corruption, they said.

(Additional reporting by Doreen Siow in SINGAPORE and Kittipong Thaichareon in BANGKOK)

[Wisarut]

Even though Khun Thanogn has denied the purchase of Shin Corp by Crown Property bureau in addition to Temasek, the nomination of Khun Chumphon Na Lamliang from Siam Cement PCL to run Shin Corp is a sure sign that there must be some inside connections with Crown Property bureau.

[Scuba22]

Better late than never - sure, I suppose. The cynical view would be that he feels he's milked all he can out of the country, and it's time to cut and run.

The ethical time to sell out and go to a blind trust would have been before he entered politics - back in 1994 (?); but of course that is unimaginable. I was under the impression that blind trusts were required by law for elected officials in the US.

It will certainly be interesting to see what he does with the proceeds. My bet is personal financial services, so that when all the consumer loans he's directed government institutions to make start going bust, he'll be able to pick them up at a steep discount, and finally have millions of Thais personally owing him money. With his new-found serfs and unmentionable ally, the "land of the free" can then become "Siam" again, under the new feudal Lords.

I'd be very surprised to see CPB take up Shin shares - my understanding was that they were trying to consolidate their investments in property, SCC and SCB, and actively trying to get rid of all manner of rats & mice in the portfolio.

But the question of ownership restrictions is puzzling to me too. How did Telenor buy out DTAC? Won't anyone get worked up by foreigners owning Thai satellites and iTV?

Personally, I think this is great for Thailand and Singapore. Thailand desparately needs rational management (sorry about the slur, but I've been singularly unimpressed by what I've seen of Thai boardrooms; I see a lot more business smarts on the street!); and Singapore desparately needs a real country to run. It's a good match, IMO.

Cheers,

Scuba22

[Wisarut]

ITVwould be purchased by Grammy Entertainment PCL though :p

[Wisarut]

Okay, now 49.,6% of Shin Corp Stock went into Temasek Portfolio ... at the price 50 Baht/stock -> total to 3.1 billion dollars (70 billion Baht) .. .

We'll see if Revenue Deportment Director would SHAMLESSLY said "This kind of transaction would not subjected to tax collection"

[Scuba22]

iTV to Grammy - of course, so sensible. I'm kicking myself for not thinking of that, it really consolidates the entertainment sector

Thanks!

Scuba22

[Wisarut]

Now, Khun Thanong Phitthaya said Shinnawatra family don't to pay ANY single satang of tax for this Shin Corp Deal with Temasek

Furthermore, Shinnawatra family has moved from Telecom to Real Estate ...

A Real Estate Tycoon like Khun Anand Asawaphokin (a friend of PM Thaksin the owner of Land and House PCL ) has already set up Land & House Bank as a creditor for those who want to buy Land & House Real Estates .... to compete with Government Housing Bank :D :p :rolleyes: :cool:

[Wisarut]

Than Setthakij has conformed that both Temasek and Crown Property Bureau (Siam Commercial Bank PCL) DID takeover Shin Corp through 49.6% shares for Temasek and 5-10% for SCB.

Crown Property Bureau (Siam Commercial Bank PCL) has sent Khun Phongse Sarasin (son of former PM Poj Sarasin - he used to run Thai Pure Drink PCL (Thai distributor for Coca Cola)) and Dr. Wijit Suraphongsechai from SCB to run ShinCrop.

Initally SingTel and SCB want to buy ShinCorp at 30 Baht/Stock ... so PM Thaksin Suspended the Deal until he got the right prices. Even worse, Khun Chumphon Na Lamliang (former Siam Cement PCL General Manager - now run as the head of SingTel (Thailand)) said he OBJECT SingTel Plan to run ShinCorp. ... SO, Temasek has got the way ...

Details on the deal:
Shinnawatra-Damaphoingse Families: 1.158 Billion Stock whcih can be broken down as follows:
1) Miss Phinthongtha Shinnawatra -> 440 million Stock => 14.92%
2) Mr Banjaphot Damaphongse -> 404 million Stock => 13.71%
3) Mr. Phanthongthae Shinnawatra -> 293 million Stock => 9.96%
4) Miss Yingrak Shinnawatra -> 20 million Stock => 0.68%
5) Ms. Bussaba Damaphongse -> 0.1598 million Stock => 0.01%


UBS AG (Singapore): 0.297 Billion stocks
Total: 1.456 Billion Stock - 49.6% of registered capital = 72.8 billion Baht ->
the biggest transactions sicne the first day for Thai Stock Market at 30 July 1975.

Buyer: Temasek Funds
Price: 49.50-50.00 Baht/stock -> all in CASH (!) :eek:
No Stock Swapping


Even though the sell are supposed to pay 15% Tax to Revenue Dept, Khun Thanong Phitthaya insists that this massive transaction is NOT subjected to tax collection due to Thai-Singapore Treaty for Taxing from capital transaction. If Temasek DID pay the tax to Singaporean Revenue Dept at least 15% of payment, the tax to Thai Revenue Dept is Exempted. :mad:

Temasek has intended to KEEP Only AIS while Temasek woudl sell ITV to Grammy Entertainment PCL and ShinSat woudl be back to the Shinnawatra family.

[Tettyan]

So this is how Temasek intends to get around the foreign ownership restrictions.

So here's the next question. Who controls Temasek's alleged local partner (other than SCB), Kularbkaew Co? Crazy how the Nation mentions them without being able to give any background! Anyone have any idea?

http://www.nationmultimedia.com/2006/01/23/headlines/index.php?news=headlines_19721825.html

SHIN SALE: Two Thai banks to fund deal
The Nation
Published on January 23, 2006

SEC to be told today of Temasek’s purchase backed by local loans of Bt26 billion. Siam Commercial Bank and Bangkok Bank will each extend Bt13 billion in fresh loans to a subsidiary of Temasek Holdings of Singapore, as part of Bt70-80 billion in cash required to take over Shin Corporation Plc, financial sources said yesterday.

Financial sources said Bangkok Bank’s Bt13-billion loan to Cypress Holdings would come in the form of a standby letter of credit guaranteed by Siam Commercial Bank.

Altogether the two Thai banks will be lending a combined Bt26 billion as part of a financing package for the largest corporate takeover ever in Thailand.

Shin Corp is expected to notify the Stock Exchange of Thailand today, followed by a news conference.

Financial sources identified the Siam Commercial Bank as one of the key players behind the Shin deal, providing financial advice and the loan to Cypress Holdings, a subsidiary of Temasek Holdings.

Cypress Holdings then will re-lend the money it gets from the Thai banks to Cedar Holdings, which will use the money as part of its Bt70-80 billion takeover of the 49.6 per cent stake in Shin Corp from the Shinawatra and Damapong families.

“If Cypress Holdings is a son company of Temasek, you can say that Cedar Holdings is a nephew company of Temasek,” said one financial source.

ML Chayothid Kritdakara, managing director of SCB Securities, has been identified as a key adviser for the mega-deal, which will reshape the face of Thailand’s corporate scene.

According to Krungthep Turakij’s Saturday edition, there are 10 shareholders in Cedar Holdings, with Siam Commercial Bank hold?ing about 10 per cent, Kularbkaew Co 41.1 per cent and Cypress Holdings 48.99 per cent.

Apparently, Temasek’s buying into Shin Corp would breach the foreign ownership limit of 49 per cent, which has prompted it to rely on its subsidiary Cedar Holdings, incorporated in Thailand, to do the buy-out. The shareholders in Cedar are largely nominees for Temasek.

Around 49 per cent of total Shin shares are “free floating” and avail?able in the local market, and most of these are expected to be snapped up by the foreign investment group.

With the sale of the Shinawatra and Damapong families’ majority stake in Shin Corp to be announced today, critics of Prime Minister Thaksin Shinawatra are sharpening their knives – over a deal they believe would raise more questions about conflicts of interests.

Shin will call an urgent meeting of its board at midday before mak?ing a filing to the Stock Exchange of Thailand. A joint press conference with Temasek executives will be held in the afternoon at a location yet to be confirmed, a source at the Thai conglomerate said.

The families of Prime Minister Thaksin Shinawatra and his in-laws jointly own a 49.6-per-cent stake in Shin which Temasek is expected to buy at a price of about Bt50 per share, totalling between Bt70-80 billion. Shin Corp has 3,000 million shares outstanding.

Temasek will also stage a tender offer for minority shares of Shin and its flagship company, mobile phone operator Advanced Info Service Plc (AIS).

The biggest deal in the Thai stock market history has been shrouded in secrecy and controversy, and Thaksin and market authorities have come under fire over the past month for lack of transparency about the imminent transfer of a major Thai asset to foreign hands.

Questions about tax and whether the Shinawatra and Damapong families would stack the staggering amount of money earned from the sale overseas are also likely to become a major polit?ical issue.

Despite suggestions that the Temasek deal was aimed partly at easing criticism of Thaksin over conflict of interests, his opponents insist that the opposite could hap?pen.

“Let’s see when the dust settles,” leading social critic Thirayuth Boonmi said during a press confer?ence yesterday when he continued to denounce “massive corruption” among top government politicians and their cronies. “The first key question is where they keep they money [from the sale] and how.”

The Campaign for Media Reform warned that the problem of conflicts of interests could become even “more complicated and scari?er” with key foreign players involved.

In a statement yesterday, the organisation attacked stock market authorities and the PM for failing to protect national interests affect?ed by the mega deal.

Meanwhile, the Shin Corp source said a Chinese telecom group had offered the families a better price than Temasek but they finally opted for the Singaporean suitor.

He said Temasek would have newly created affiliate, Cedar Holding, to hold the shares it buys from the families and would later try to project that Shin is still a Thai-owned company.

While Temasek had Goldman Sachs as its financial adviser in the deal, the families have not hired an adviser but scrutinised the deal themselves, the source added.

The source said Pong Sarasin, former chairman of Thai Pure Drinks and Surathip Group, would replace Bannapot Damapong, elder brother of Thaksin’s wife Pojaman, as Shin chairman.

There is also expected to be a new chairman at AIS, a post currently held by Paiboon Limpaphayom.

The source said Temasek was interested only in AIS and would gradually sell off Shin’s other major businesses, including free-TV operator iTV Plc and budget airline Thai AirAsia.

Shin’s also has a satellite service and broadband Internet business.

Telecom, Political Reporters

The Nation

[Tettyan]

Press Release from the Stock Exchange of Thailand's website:

http://www.set.or.th/set/newsdetails.do?filename=dat%2Fprsnews%2Fnews%2F020 1NWS230120060140040053E.txt&headline=Board%27s+Resolutions%3Athe+sale+shares+o f+major+shareholders&type=R&symbol=SHIN&time=1137998457000&localeoverriding=yes&country=US&language=en

January 23, 2005

Re: Notification of resolution of the Board of directors
meeting no. 1/2006

To: President
The Stock Exchange of Thailand

Shin Corporation Public Company Limited ("the Company")
held the Board of directors meeting no. 1/2006 on January 23, 2006
at 11.00 a.m. to consider the business plan of the company for
the year 2006 as ordinary. In addition to the said agenda,
during the meeting the Company has been informed by the major
shareholders, which are comprised of Miss Pintongta Shinawatra,
Mr. Bhanapot Damapong Mr. Phantongtae Shinawatra, Miss Yingluck
Shinawatra and Mrs. Busaba Damapong, that they had sold their
shares of the Company to Cedar Holdings Limited ("Cedar") and
Aspen Holdings Limited ("Aspen") in the amount of 1,487,740,120
shares, equal to 49.595% of paid up capital of the Company,
on January 23, 2006 at the price of 49.25 per share including
Cedar and Aspen have informed the Company regarding the details
of shares purchase from the major shareholders. The meeting
has urgently considered regarding the purchase and sale of
the company's ordinary shares by major shareholders as follows:

1.Acknowledged the sale of the company's ordinary shares by major
shareholders with the following details,

Shareholders amount % of paid up capital
Miss Pintongta Shinawatra 604,600,000 20.15
Mr. Bhannapot Damapong 404,430,300 13.48
Mr. Phantongtae Shinawatra 458,550,220 15.29
Miss Yingluck Shinawatra 20,000,000 0.67
Mrs. Busaba Damapong 159,600 0.005
Total 1,487,740,120 49.595

As a result of this transaction, Cedar and Aspen are obliged to make
a tender offer for all securities of the Company according to the
Notification of the Securities and Exchange Committee No. Gor
Jor. 23/2545 Re: Rules Condition and Procedure for the Acquisition
of Securities for Business Takeovers.

The primary information of Cedar and Aspen as follows;

Cedar
1) Name of directors and authorized signatories
1. Mr. S Iswaran
2. Ms. Tan Ai Ching
3. Ms. Chai Yue Joo
4. Mr. Bodin Asavanich

Authorized signatories are "1. Any two of directors can sign jointly with
affixing the Company's seal. 2. One director can sign with affixing the
Company's seal on the required documents which need to submit at the
Ministry of Commerce and the Revenue Department"

2) Name of major shareholders
1. The Siam Commercial Bank PCL holds 9.9 % of the
registered capital

2. Kularb Kaew Company Limited holds 41.1 % of the
registered capital

3. Cypress holdings Limited holds 48.99 % of the
registered capital

Aspen: 1. Anderton Investment Pte. Ltd. Holds 99.94 % of the
registered capital

continued....

[Tettyan]

...continued from previous post

...

3) Registered capital is Baht 400,000,000


Aspen

1) Name of directors and authorized signatories
1. Mr. S Iswaran
2. Ms. Tan Ai Ching
3. Ms. Chai Yue Joo
Authorized signatories are "1. Mr. S Iswaran, Ms. Tan Ai Ching and
Ms. Chai Yue Joo, any two of these three directors can sign jointly
with affixing the Company's seal. 2. One director can sign with
affixing the Company's seal on the required documents which
need to submit at the Ministry of Commerce and the Revenue
Department"

2) Name of major shareholder is Anderton Investment Pte. Ltd.
Holds 99.94 % of the registered capital

3) Registered capital is Baht 100,000

However, in connection with the policy to join the management of
the company, the Company has not been informed from Cedar and Aspen.
If there is some more information, the Company will inform promptly.
Moreover, Cedar and Aspen has confirmed to the Company that the
Cedar and Aspen do not have an intention to delist the Company
from the Securities Exchange of Thailand ("SE") during the
12-month period after the end of the Tender Offer period unless
the Company is unable to maintain its listing status under the
regulations required by the SET or the Board of directors of
the Company deems it appropriate to propose to delist the Company.

After the Company receive the information from the major shareholders,
the meeting has consider the agenda that relevant the purchase and
sale of the company's ordinary shares by major shareholders

2. Acknowledged the resignation of Mr. Bhannapot Damapong,
Mr. Surasak Vajasit and Mr. Aaruk Chonlatanon and unanimously
approved the appointment of the following person to be new
directors of the Company.

- Mr. Pong Sarasin will hold the office of Mr. Bhannapot Damapong

- Mr. S Iswaranwill hold the office of Mr. Surasak Vajasit

- Mr. Wichit Surapongchai will hold the office of Mr.
Aaruk Chonlatanon

Moreover, in the case that Mr. Bhannapot Damapong, who holds
the Chairman of the Nominating Committee and the Chairman of the
Remuneration Committee, has resigned from such positions,
Mr. Pong Sarasin shall replace the said positions of Mr.
Bhannapot Damapong.

3. Approved the amendment of authorized signatories of the Company
to be compatible with the appointment of new directors, as follows:

"Mr. Wichit Surapongchai, Mr. S Iswaran, Mr. Boonklee Plangsiri, Mrs.
Siripen Sitasuwan, two of these four directors sign jointly together with
the compan's seal affixed"

4. Acknowledged the making of a tender offer for all securities of
the Company. As the case that the major shareholders have reported
the sale of their shares to Cedar and Aspen in the amount of
1,487,740,120 shares, equal to 49. 595 % of the paid up capital.
Cedar and Aspen are obliged to make a tender offer for all securities
of the Company according to the Notification of the Securities and
Exchange Committee No. GorJor. 23/2545 Re: Rules Condition and
Procedure for the Acquisition of Securities for Business Takeovers.
Moreover, the Company are obliged to prepare an opinion concerning
the tender offer in the form 250-2 and shall submit such opinion
to the Office of the Securities and Exchange Committee ("the Office")
and shall deliver a copy of such opinion to each shareholder within
15 business days from the date that the Company received the offer
from Cedar and Aspen. Furthermore, in preparation of such opinion,
the Company shall appoint independent financial advisor to be the
advisor who represent the shareholders and make an opinion concerning
the offer. The meeting has empowered to the Executives Committee to
consider and proposed the independent financial advisor to represent
the shareholders and make an opinion concerning the offer to the
audit committee for approval.

5. Acknowledged the announcement of Voluntary Tender Offer by informing
to the Advanced Info Service Public Company Limited ("ADVANC") at the
price of Baht 72.31 per share. In this regard, Cedar and Aspen receive
the waiver for not obliged to make a tender offer as prescribed
in Clause 8 of the Notification of the Securities and Exchange
Committee No. GorJor. 53/2545 Re: Rules Condition and Procedure
for the Acquisition of Securities for Business Takeovers
(Chain Principle) from the Securities and Exchange Committee
because of the Voluntary Tender Offer of ADVANC's shares has
compensate the Tender Offer of ADVAN's shares that will occur
in the future if Cedar and Aspen hold 50% of paid up capital
of the Company after the voluntary tender offer has made.

6. Approved that the Company not to sell any shares of ADVANC
which the Company holds 1,263,712,000 shares, equal to 42.82
of paid up capital, according to the public announcement of
Cedar and Aspen that they will make a voluntary tender offer
for ADVANC shares because the Board of Directors viewed that
business of ADVANC is able to gain major profit to the Company
and ADVANC's performance is always impressive.

7. Acknowledged the obtaining of a waiver from making chain
principle tender offer as prescribed in Clause 8 of the
Notification of the Securities and Exchange Committee No.
GorJor. 53/2545 Re: Rules Condition and Procedure for the
Acquisition of Securities for Business Takeovers (Chain Principle)
for all securities of ITV Public Company Limited ("ITV"), Shin
Satellite Public Company Limited ("SATTEL") and CS LoxInfo
Public Company Limited ("CSL"). As the Takeover Panel of Thailand
("Takeover Panel") viewed that Cedar and Aspen do not intend to
acquire the securities of ITV and SATTEL, plus, ITV and SATTEL
are do not constitute a substantial portion of the assets of
SHIN, therefore, the Takeover Panel grants a waiver from making
a tender offer for all securities of ITV and SATTEL to Cedar and
Aspen. Moreover, as the Company and SATTEL holds less than
50% of paid up capital of CSL, Cedar and Aspen are not obliged
to make a tender offer as prescribed in Clause 8 of the
Notification of the Securities and Exchange Committee
No. GorJor. 53/2545 Re: Rules Condition and Procedure
for the Acquisition of Securities for Business Takeovers
(Chain Principle) as well.

Furthermore, to provide enough time for shareholders and investors
to analyze that information prior to the subsequent trading of
shares of the Company, the Company would request the temporary
suspension on trading of the Company's shares since 14.30 to
16.30 of today.

Please be informed accordingly.

Sincerely Yours,
-Signed-
(Mr. Boonklee Plangsiri)
Director
Shin Corporation Public Company Limited

[Tettyan]

So now we have a little bit of an idea about who's behind Kularb Kaew. But their chairman says that the initial shareholders will sell off their shares soon to repay the loans needed to buy their stake in Shin. So the $64 question is - to whom do they plan to sell? Maybe I'm reading too much into this - and that this is just one step in a straightforward plan to bring more Thai investors on board, in order to comply with foreign-ownership restrictions. Or could it open the door for the Shinawatras or other politically-connected groups to buy back into the company in future? I saw some i-banker say that if that's what they planned to do, such a set-up would allow them to do so without so much public scrutiny. Since I'm not an expert on the subject, I'm not really sure what to believe.

http://www.nationmultimedia.com/2006/01/24/business/index.php?news=business_19730654.html


CROSS-BORDER TAKEOVER: Two new firms pay Bt73 bn for Shin
Published on January 24, 2006

Companies with cross holdings created just weeks before purchase. Three companies involved in the takeover of Shin Corp Plc – Cedar Holdings Co Ltd, Aspen Holdings Co Ltd and Kularb Kaew Co Ltd – were hastily established in Thailand this month, showing how intense the manoeuvres have been.

“There has been discussion on this deal for some time but the talks heated up in the past six weeks,” said one of the advisers.

Cedar was established on January 17, a week before the deal was announced yesterday. Kularb Kaew was established two weeks ago while Aspen was set up last Monday.

Cedar and Aspen yesterday wrapped up the takeover to buy 49.6 per cent from the Shinawatra and Damapong families for Bt73.3 billion. Kalarb Kaew holds 41 per cent of Cedar.

According to former DBS Bank chairman Pong Sarasin, chairman of Kularb Kaew, even though the deal was sealed, Kularb Kaew could be subject to a shareholding change soon.

“Kularb Kaew was established to make Shin a Thai firm after the transactions, but I’ll soon have to sell the stake,” Pong said.

The change in shareholding structure is cited as a means to repay a Bt24 billion loan extended by Bangkok Bank and Siam Commercial Bank to help finance the share purchase. To repay the loans, Kularb Kaew will sell its shares to local investors – including financial institutions and private funds – to seek funds to repay the loans, Pong said.

Under the deal, Temasek Holdings brought in nearly Bt50 billion for the purchase, which was paid through its wholly-owned arm Aspen, while the Bt24 billion was financed by the loans.

Siam Commercial Bank president Jada Watanasiritham said that her bank’s Bt11 billion loan contained no risk as it was fully guaranteed by leading banks in Singapore.

“We have discussed this with the board and we see huge benefits from lending to the country, the telecom industry and the bank itself,” she said. Under the deal, SCB is also a shareholder in Cypress Holdings, which in turn is a major shareholder in Cedar. “This is meant to be a long-term investment,” Jada added.

Of all the Shin shares that changed hands, 38.6 per cent were bought by Cedar and the remainder by Aspen.

Kularb Kaew was co-established two weeks ago by Pong and Supadet Poonpipat, chief executive of Thanachart Bank, together with Temasek. Pong and Supadet jointly own 51 per cent in Kularb Kaew, while Temasek owns 49 per cent. The company’s total registered capital is about Bt160 million.

A financial analyst expressed doubt the Shinawatra family would set up a local fund to acquire shares in Kularb Kaew. If the family did, it would mean they would still have a controlling interest in Shin.

“Anyway, if the family did that, it would be hard to trace and that means the family’s image will remain good,” the source added.

It has been speculated that one reason for the prime minister’s family’s exit of Shin is to deflect criticism of conflict of interest, but a family representative, Suvarn Valaisathien, said yesterday that the decision of the Shinawatra and Damapong families to dispose of their combined 49.6 per cent share to the Temasek-led group was a purely business one.

He said that the families do not want to further invest in the capital-intensive telecom business.

Business Reporters

The Nation

[Scuba22]

Any investment banker worth half a damn knows full well how t get around shareholding restrictions. I can't comment on the Shin structure specifically since I don't know the details, but I can lay out the basics - it's not very complicated actually.

The key is understanding the difference between shareholding (who legally owns how many shares and therefore % of the company), management & governance (who makes decisions), and financial disbursements (where the money goes). These are not the same things, and do not necessarily need to be consistent with each other.

Shareholding is the only item which is covered by the restrictions (I believe); but in many ways, it's the governance and financial disbursements which are the important parts of the business. Suppose you own 80% of a company and I own 20%. We can still agree that I, the minority, will have a management contract to run the business as I see fit. We can further agree that my management compensation will be tied to the profits of the company. That way, the financial distribution can be totally different than the shareholding.

This is where financial structures like intermediary companies and shareholder loans come into play - essentially they're clever ways of adhering to the letter of the law while violating the spirit of it. And if anyone is excellent at doing that, it's our pal Thaksin.

All that being said, I should state that I personally believe that shareholding limits for foreigners are stupid on many counts - let me know if I need to get into this, though I suspect most people in this board feel the same way.

Cheers,

Scuba22

[The Enforcer!]

Can anyone explain the reasoning behind why no tax is being sought by the Revenue Department?

Are share transactions usually tax free?

The Enforcer!

[Tettyan]

A neat little diagram outlining the structure of the deal is on the Manger's website. Maybe we can start from this and start trying to fill in the blanks.

http://www.manager.co.th/IHT/ViewNews.aspx?NewsID=9490000010092

[BangkokPundit]

Can anyone explain the reasoning behind why no tax is being sought by the Revenue Department?

Are share transactions usually tax free?

The Enforcer!

Today's Bangkok Post has a translation of a Post Today Editorial (http://www.bangkokpost.com/News/26Jan2006_news23.php) which I have quoted below which mostly answers your question.

In the largest corporate takeover in Thai history, Prime Minister Thaksin Shinawatra's children and relatives on Monday sold their shares in Shin Corp to Singapore's Temasek Holdings that will generate a tax-free income of more than 73 billion baht. The deal was executed with great prudence. By making the share sales on the Stock Exchange of Thailand, the Shinawatra children and relatives legally enjoy income tax exemption on earnings. But this is not the first time that such tax-free share transactions have been made on the SET.

Late last year, Telenor of Norway took over United Communication Industry and its mobile phone subsidiary Total Access Communication, the operator of DTAC, which resulted in the founding Benjarong-kul family exiting the Thai telecom industry. The Benjarongkul family did not pay tax for the share sales worth about nine billion baht, also made on the stock exchange.

In the case of Shin Corp, everything was done according to the SET's regulations. No one can accuse the Shinawatra family of tax evasion. But because the shares were sold to a foreign company and at a very high price, a lot of questions were raised among the public and the media. If tax were collected, several billion baht could go to the state coffers for use in national development projects.

Is it high time that certain legal loopholes were plugged to prevent businessmen and politicians from reaping huge sums of money through stock manipulation or speculation? Right now, capital gains tax is waived if a share transaction is conducted through the Stock Exchange of Thailand. The tax exemption was introduced more than 30 years ago to encourage private companies to list on the SET and attract more investors.

With the SET now fully developed, we should consider whether the capital gains tax should be imposed.

We can learn from our mistakes and it is never too late to change things. Just consider how much tax the SET can generate for national development

[Scuba22]

From the IHT article linked by Tettyan:

The pricing decision, said deal advisor ML Chayotid Kridakon, was based on the value of the asset.

“A takeover of this magnitude is very rare and there are few [examples] we could base this on,” he said.

(end quote)

Is this a joke? People are pretty high on themselves around here - this may be a big deal by local standards, but it's peanuts compared to global M&A. Here's a short list just from the telecoms sector in 2005:

NTL-Telewest (UK): US$ 6 billion
MCI-Verizon (US): US$ 8.5 billion
SBC -AT&T (US): US$ 16 billion

If you go back to 1999, there's tons of telecoms mergers above US$ 30 billion: AT&T-TCI, MCI-WorldCom, Vodaphone-Airtouch, Telecom Italia-Olivetti, Bell Atlantic-GTE.

Granted these were during a big telecoms bubble, but still, the idea that a US$1.8 billion deal is interesting as a business transaction is silly. The interesting portions of this deal relate to politics and popular perception; the business aspects are fairly banal.

Cheers,

Scuba22

[Scuba22]

Capital gains taxes are a routine political issue in the US. The "rational" argument is that high capital gains taxes make it more difficult for assets to find their "best" owners but placing an artificial incentive against selling things.

The case for high capital gains taxes are more emotional, IMO; since it's usually rich people who own assets to begin with, they're the ones who tend to make capital gains and thus be liable for any capital gains taxes. Cutting capital gains tax thus lowers taxes for primarily rich people - usually not a popular idea.

When the numbers are this high for a single person/family, it does look bad to people, regardless of the rationality or legality of the actual action.

Cheers,

Scuba22

[jpatokal]

Granted these were during a big telecoms bubble, but still, the idea that a US$1.8 billion deal is interesting as a business transaction is silly. The interesting portions of this deal relate to politics and popular perception; the business aspects are fairly banal.
This is Thailand, not the US. One of the newspapers (WSJ?) was reporting this as the biggest acquisition in Thailand ever, so yes, it is a pretty big deal. Another way to think about it is that it's equivalent to Temasek paying over 1000 baht for every man, woman and child in Thailand... that's a lotta SMSes!

[Scuba22]

Sure, it's a bit deal for Thailand and Singapore - it's about 2% of the GDP of each country, the US equivalent would be a US$235 billion deal - that's massive, absolutely.

My comment was about someone saying that the valuation of such a deal was very difficult because a deal that size is so rare. That's nonsense. Investment banks make valuations on multibillion dollar deals regularly. Temasek was advised by Goldman Sachs, for whom this is a pretty standard deal. The Shinawatras apparently decided to advise themselves instead of getting a major international investment bank to help.

Locally & politically, it's a big deal; but we shouldn't kid ourselves, it only looks like giant fish because it's in a tiny pond.

Don't forget, just a few years ago, SingTel payed about US$10 billion for Optus. The market didn't react kindly - SingTel's shares plummeted afterwards. Pity that Temasek isn't listed or we could get some market reaction to that as well.

Cheers,

Scuba22

[Tettyan]

Aside from the whole "Ample Rich" affair, I had though that the Shin sale at least followed the letter of the law. We could all say what we want about the Shinawatra family's ethics, but it seemed that the law entitled them to the tax exemption on the share sale.

Now, the President of the Law Society of Thailand is arguing otherwise - that the authorities who granted the tax exemption operated outsie the law. Does this count for something, or is he just pulling our leg? Since I'm no investment banker or securities lawyer, I was hoping that those who read this forum who are more familiar with such technicalities could try to shed a little more light.

http://www.nationmultimedia.com/2006/02/07/business/index.php?news=business_19854995.html


ANALYSIS: Temasek-Shin Corp deal offers a free lesson in tax-planning
Published on February 07, 2006

The Temasek Holdings-Shin Corp deal might have cost Prime Minister Thaksin Shinawatra political clout, but it carries several virtues, especially to businessmen who have been given a free lesson on tax planning. Despite several dubious tax issues, the authorities have brushed aside public demand that the five persons benefiting from the sale of shares in Shin Corp Plc be taxed.

Even before the explanation by the Shinawatra family’s legal counsellor Suvarn Valaisathien last Wednesday, Finance Minister Thanong Bidaya said that the deal was wrapped up within a proper legal framework.

A day later, the Revenue Department at a press conference reiterated its stance: none of the sellers should be taxed on the Bt73.3 billion proceeds they reaped from selling a 49.6-per-cent stake in Shin to Temasek.

Renowned for his legal counselling and rated as one of the country’s tax planners, Suvarn also insisted that the deal had been executed in accordance with Thai law.

Paul Ashburn and Andrew Jackomos, senior partners of BDO Richfield Advisory Ltd, an international tax consulting firm, said in a letter to The Nation: “There is no new precedent set here. Every day people sell shares on the stock market tax free, in accordance with the law. Every day taxpayers exercise their legal right to arrange their affairs so they can legally minimise their tax bill. The public should be thankful for the free lesson on tax planning.”

Now tax planners can advise their clients to copy the entire process of these transactions, which date back to 2000.

Then, Thaksin’s wife, Khunying Pojaman, transferred Shin shares to her brother Bhanapot Damapong at par without paying tax. Thaksin’s transfers of shares to his children, Panthongtae and Pinthongta, were not taxed either, nor the transfer of shares to his sister, Yingluck.

No taxmen were present when there were transactions of shares between the British Virgin Islands-registered Ample Rich Investments Co Ltd and their former and present shareholders.

To tax planners, these two episodes were determined on the right grounds. While not yet making any profit from the shares, the beneficiaries should not pay taxes for non-existent benefits.

Still, several lawyers raised eyebrows when learning that they were still untaxed after realising capital gains from the shares.

In the first case, Bhanapot and Yingluck reaped Bt39.25 per share in profits, when selling those they received at Bt10 par value at Bt49.25 apiece on January 23. Panthongtae and Pinthongta netted an even higher amount – Bt48.25 per share – on the 329.2 million shares they bought from Ample Rich on January 20 at only Bt1 a share.

Taxmen said selling shares in the stock market sheltered them from capital gains tax.

Dej-udom Krairit, president of the Law Society of Thailand, was outraged with the conclusion. He noted that it is against the Revenue Code.

The Law Society launched a statement explaining that a company’s shares enjoy two statuses: common shares and listed securities. “The law says if you accumulate common shares, you have to sell them as common shares [out of the market]. If you have listed securities, you have to sell them as listed securities [in the market],” Dej-udom said.

He noted that the deal broke the law when Thaksin and Pojaman transferred their shares to their relatives as common shares, but the shares were sold as listed securities.

A dubious point lies with the multi-level share transactions of Ample Rich between Thaksin, his son and his daughter, which does not involve any taxation.

Whatever the accusations might be, they have now been clarified by the financial authorities. And tax planners can now give similar advice to billionaires who need no longer worry about the enormous taxes that share transactions to their children should incur.

There are none.

Business Desk

The Nation

[GWR]

This won't do anything positive for business confidence: -

Supreme Administrative Court accepts Shin Corp case


The Supreme Administrative Court ruled Thursday to accept a lawsuit seeking to cancel licenses granted to Shin Corp for communication satellites, mobile phone services and television broadcast.

The suit was filed by law lecturer Sastra Toon in March, saying Shin Corp was no longer entitled to hold the licenses because its businesses were under the control of Temasek Holdings of Singapore.

The Central Administrative Court earlier rejected the case on ground that Sastra was not a contractual party.

But the Supreme Administrative Court ruled Thursday that Sastra could file the suit in his capacity as a user of such telecom services.

The Nation


http://www.nationmultimedia.com/breakingnews/read.php?newsid=30015446

[Scuba22]

If anyone thought that doing business with Thaksin was free of political risk, they were fools. Any risk has downside, and this is the downside. All that's changed is perception - the risk was always there.

"Business sentiment" can be pretty stupid, and often is. It's scary that so much is dependent on it.

[jpatokal]

If anyone thought that doing business with Thaksin was free of political risk, they were fools. Any risk has downside, and this is the downside. All that's changed is perception - the risk was always there.
Yup. This has been downplayed (hell, completely ignored) in Singapore media, but Eris Ellis has it spot on:

http://www.theage.com.au/news/business/thai-adventure-backfires-on-singapore-inc/2006/09/24/1159036414899.html

It'll be interesting to watch how this blows over if (when?) the deal is formally cancelled.

[Scuba22]

Temasek was being advised by Goldman Sachs, and given Goldman's reputation, they must have thought they were getting decent advice. Yet it's easy to see that the best minds of the best multinationals aren't usually in Southeast Asia, and the Thai contingent is usually several steps below the Singaporean contingent. It makes sense - you don't climb the corporate ladder through Thailand. If you want to make a splash in Asia, you go to Japan, China or India - and perhaps Taiwan or Korea, but Thailand? Naah.

You see people running around with fancy business cards in Thailand, yet the quality of the peoples' skills is such that they'd have a tough time in a bigger market with greater competition.

So it is with Goldman's Thai staff. First, they barely have any Thai staff - just a "representative office" in Bangkok staffed by "relationship managers" whose main purpose is to stay friendly with all major powers and decision-makers. In ordinary times, this is a fine situation. When the brains in Hong Kong come up with some idea, the local flunky can put then in front of key people; and when key people here need brains, the flunky can call Hong Kong. It works out fine - Goldman took stakes in the Dusit Thani Hotel and the Regent (now the Four Seasons) after the crash and did very well; as did its Bangkok Capital Alliance JV with GE Capital.

But you can't count on "relationship" guys to make any decent analysis - all they know is what they hear from their contacts, and if they're spending all their time with TRT cronies, they're not exactly getting decent information.

Temasek clearly got crap advice from Goldman's Thai team, and now it's going to cost them. But what does Goldman care? They've gotten their cut and now its time for the cigars. If they had any self-respect they'd hang their Thai team up to dry, but don't count on it.

Scuba22

PS = thanks for the article, very interesting!

[jpatokal]

Temasek is also in the advantageous position of playing with other people's money, as opposed to their own, and being basically unaccountable to anybody for the mistakes it makes :mad:

And the trend of the Thai representative offices of multinationals not being up to scratch is far from limited to Goldman...

[FarangBha]

With an anual average salary of half a million US - including secretaries and other minions - I'd be happy to advise them, if I was that way inclined.

[GWR]

This almost looks like part of an attempt to create distance with Thaksin as well: -


Read a full statement of HRH Crown Prince's Personal Affairs Office on MR Thongnoi Thongyai. MR Thongnoi was approached to be an advisor to Temasek Holdings' Bangkok Office.

HRH Crown Prince's Personal Affairs Office

Statement

Some press reports stated that Temasek Holdings had approached MR Thongnoi Thongyai to be an advisor for their office that would be set up in Thailand. They mentioned that MR Thongnoi Thongyai was personal secretary and advisor to HRH Crown Prince Vajiralongkorn and was assigned to take care of the royal properties since 2000.

HRH Crown Prince's Personal Office would like to announce that the reports have caused misunderstanding and confusion as the claims were false and were used as a means to establish influences for his own business benefits. The claims have caused damage not only for the country, but also instability for the international investment in Thailand.

In fact, MR Thongnoi Thongyai is a cunning man and has improper personal characters. He was not permitted to extend his term as HM's Deputy Principal Private Secretary. He then asked to be transferred to work in HRH Crown Prince's Secretary Office. HRH Crown Prince had enough mercy to employ him. He was assigned to work according to his profession - which means translating and drafting English documents and occasionally writing letters.

However, he has been tricky and cunning. He usually liked to claim and link himself to HRH Crown Prince. When he worked, he usually had hidden agenda and his works often lacked transparency. These caused dissatisfaction among his co-workers at all levels. He did not realise kindness of HRH Crown Prince who gave him opportunities for him to prove himself.

On the contrary, he took advantage and made false claims for his own benefits by setting up his positions which led him to be approached to be an advisor to Temasek Holdings. His acts were considered ungrateful and he did not realise HRH Crown Prince's kindness. They also caused damage to institutions and the country.

HRH Crown Prince's Personal Office considered MR Thongnoi Thongyai not right, improper and abusive of power for his own benefits. His acts have caused misunderstanding among the public and caused damage to the HRH Crown Prince's Personal Office. The Office thus has decided to explain and announced these facts to the public.

HRH Crown Prince's Personal Office.

[GWR]

MR Thongnoi could not be trusted : HRH Crown Prince's Secretary Office

In a strongly-worded statement, HRH Crown Prince Maha Vajiralalongkorn's secretary office has criticised press reports linking MR Tongnoi Tongyai, an official at the office, to an advisory role for Temasek Holdings and declared that Tongnoi was not a man to be trusted.

The statement has become one of the most dramatic chapters in the unfolding saga of Temasek takeover of Shin Corp that had led to the eventual downfall of former prime minsiter Thaksin Shinawatra.

In the statement, the HRH Crown Prince's Secretary Office said that Thongnoi's intention to make such claims was for his own benefits and caused damages not only for the country but for the international investment in Thailand.

It referred to earlier news reports that Temasek Holdings in Singapore had approached Thongnoi to be advisor for their Bangkok office that is going to open soon. The reports claimed that he was personal secretary and advisor to HRH Crown Prince Maha Vajiralongkorn since 2000.

The statement issued on Saturday said that the claims were groundless and were used as a channel to build up influences for Thongnoi's own benefits.

Earlier on Thursday, Temasek Holdings announced that MR Tongnoi Tongyai would not become the adviser for the company's local office in Thailand as reported.

"After thorough consideration, MR Tongnoi Tongyai and Temasek Holdings unanimously agree that MR Tongnoi will not be the adviser for Temasek's office which will be established in Thailand," Jimmy Phoon, senior managing director of the Singapore government investment arm, said in a press statement.

The announcement ends speculation that Temasek was trying to quash criticism over the morality of its investment in Thailand with the appointment of Tongnoi, who is a deputy principal private secretary to HRH Crown Prince Maha Vajiralongkorn.

http://www.nationmultimedia.com/2006/10/28/headlines/headlines_30017377.php

[GWR]

"Cunning as a fox", according to Khun Wisarut: -

http://www.angkor.com/2bangkok/2bangkok/forum/showpost.php?p=12113&postcount=8

For the case of Temasek, the Office of Crown pricne Affairs has made an official announcement that

"The Act of Mom Rajwongse Thongnony Thongyai to be a Thai adviser for Temaske (Thailand) is TOTALLY inappopriate ...His character is also UNWORTHY to work as Deputy Royal Secretariate ... He is worthy a scribe and royal translator for the Crown Prince ...

However, his nature of fox who keeps ABUSING the royal patronage has kept his coworkers frustrated ... The ingrateful action of this man is to become a Thai adviser for Temasek Thailand, despite of his kindness ....

Therefore, we NO LONGER consider this man as a worthy servant for the Crown Pricne and Royal Household ....Any action of this man is NOT boudn to Crown Prince Office or Royal Household."

http://www.manager.co.th/Politics/ViewNews.aspx?NewsID=9490000133603

[GWR]

Background to the statement: -

About two weeks ago, a news story was leaked that Temasek had approached MR Tongnoi to be its local adviser.

As Temasek had planned to set up its Bangkok representative office before the end of this year, it wanted MR Tongnoi as its adviser.

It was expected to later appoint MR Tongnoi to sit on the Shin Corp board and, eventually, make him chairman, replacing Pong Sarasin.

Temasek had reportedly not been happy with Pong as throughout the Shin Corp ordeal he had done little to defend the deal.

However, a source said Pong's family members, particularly his son-in-law, had been disturbed by the turmoil surrounding Shin Corp and wanted him to step down.

When news broke that MR Tongnoi might replace Pong, Temasek tried to save face by issuing a statement to assure parties concerned that it still had full confidence in Pong.

But it was Temasek who had leaked the story that Tongnoi would be its white knight and replace Pong.

Tongnoi had been a director of Total Access Communications (TAC), the country's number two mobile-phone operator, when Temasek approached him.

He joined the board of TAC on the recommendation of a phuyai (a person of power and influence). He then abruptly informed TAC's board that he would be resigning, without giving any reason.

The following day, his name appeared in the Bangkok Post, saying that as Private Secretary to HRH Crown Prince Maha Vajiralongkorn, he would be joining Temasek.

"Do you think Temasek knows what it is doing?" said one Thai official, who said he frowned upon reading the story of Tongnoi's appointment as Temasek adviser.

Most Thais who had read the story would understand the serious implications of Tongnoi's acceptance of the Temasek offer.

The Shin Corp deal has become such a full-blown political controversy that it has cost Thaksin Shinawatra his premiership and his family has come under investigation over their wealth.

Moreover, Temasek's purchase of Shin Corp's assets are considered as having national security implications due to the satellite and television systems involved. This has also touched a nerve with many people, suspicious of the island state's intentions.

"I don't know who advised Temasek about MR Tongnoi. In Thailand, when you mention the name of someone, we know where the connections are and where they will lead. But the Singaporeans don't get it," said one person who has been following the Temasek deal closely.

The Tongnoi episode further exposed Temasek's thinking: that it is willing to forge illusionary connections to high places to build its business. This goes beyond Singapore's claim that Temasek's purchase of Shin Corp was mainly based on "commercial judgement".

[Baton Rouge]

I have no idea whether Prof Ball has any authority on these matters, but to the layman this report does seem to pose two pretty fundamental questions which should not be left to the talking heads alone:

(1) How did Thailand ever allow its 'vital' communications networks to be compromised by allowing its PM to write his own rules on the telecommunications sector?

(2) Will the eventual fix to this crisis also involve a complete lack of transparency?

And perhaps even: (3) How does this square with the ex-PM's frequent claim that he "came from the people"? It is all too obvious that he has long had a preference for keeping ordinary people out of such issues - even when it related to matters that impinged on them directly, and that were comparatively easy to understand.

In all fairness, we could ask similar questions of just about every Thai government in the last few decades.

http://www.nationmultimedia.com/2007/01/23/headlines/headlines_30024843.php

NATIONAL SECURITY
ShinSat sale 'tragic blow for defence'

Expert says takeover should be blocked or Thailand would have to spend billions to ensure signals are not intercepted


Singapore's takeover of the Thaicom satellite and AIS mobile phone company is a "tragedy" for Thailand's defence communications network and should be blocked if possible, a top Australian defence analyst said yesterday.


Deal of the Century

Professor Des Ball said the sale of the ShinSat satellite and AIS to Temasek would end up costing Thailand billions of baht - which would be the price of having to launch a new satellite to ensure the Thai military's signals could not be intercepted.


"It's not in Thailand's interests to allow Singapore control of such a critically important communications system, through the satellite and mobile phone company," Prof Ball said in an interview in Bangkok yesterday.


"That's why they [the Thai Army] are now talking about their own satellite and using [two-way] radios - their system has been compromised."


Professor Ball, from the Australian National University in Canberra, is a world authority on signals intelligence. A regular visitor to Thailand and Southeast Asia, he has strong links with the Thai military.


Prime Minister Surayud Chulanont said yesterday the government would solve the problem in the long run - by either buying the [ShinSat] stake back or launching a new satellite. "We have to think about this in various aspects, not only security, but also commercial," Surayud told reporters.


"Further, we don't know whether the current stakeholder wants to sell to us."


The government had no plan to launch a new satellite in the short term, but the Information Communications and Technology Ministry was likely to launch its own satellite late this year, he said.


Prof Ball said Australia went through a similar debate five years ago when Singtel purchased the Optus mobile phone company. He was one of a series of analysts who publicly opposed the takeover. The Australian government eventually allowed the sale to go through, partly to ensure continued close cooperation with the island state, but Australia had to spend a huge sum on fibre-optic cables to avoid use of the Optus satellite and ensure its defence communications were secure.


Part of the problem, Ball said, was "Singapore have a track record of taking advantage of information for commercial and political purposes" - as did the US, and former Soviet Union.


Singapore had "listened to and photographed Australian military facilities", which had created diplomatic rifts, he said.


"They have a history of abusing their access to training in other facilities abroad.


"That is not what friends are supposed to do - they abused their friendship," Ball said.


But remarks made recently by Army chief General Sonthi showed it was very clear Thailand was aware of the problem posed by the Shin takeover, he said.


The sale of ShinSat to Temasek had "given Singapore direct access to the Royal Thai Army's satellite communications", Ball said.


"They are going to have to have their own independent system, otherwise they hand their military and very sensitive [data] traffic to Singapore on a plate.


"It's a tragedy they've handed that away with the Shin deal and will now have to redesign their own system.


"If they could get out of this [Shin] there are national security reasons why they should. If not, they'll have to spend billions [of baht] - or hundreds of millions of dollars - to redesign another satellite system. Launching a new satellite could cost US$250 million.


"If I was in [Thai] Army HQ [headquarters] I'd be trying to get out of this [Shin] deal as quick as I could."


Singapore already had an extensive array of satellite listening facilities, from a major base on Sentosa Island to listening equipment at the Thai Army base in Sai Yok - which Prof Ball said appeared to be "primarily focused on Thailand" - judging by the types of antennae he had seen there in recent years.


There were both HF (High Frequency) and VHF (Very High Frequency) antennae at the Singaporean compound at RTA base in Sai Yok, but he believed "the VHF is predominantly listening to Thailand" within a radius of 100-150km. A priority target might be a military base such as the Ninth Division and its associated units at Kanchanaburi.


Ball presumed that Thai military data sent via the Thaicom-3 would be encrypted - "so that's not easy [to decode ] ... it depends on the level of encryption and the Singaporeans' ability to access this stuff.


"The Thaicom-3 satellite system carries a considerable amount of military and non-military [data] traffic. And in a sense, AIS and the mobile phone system is the same issue - it's the ability [of Singapore] to monitor the mobile phone traffic devices from that satellite."


Thailand's communications experts were "very switched on" and among the leaders in Southeast Asia, Ball said. "And Thaicom-3 is one of the most advanced in Asia.


"These guys know how your circuits flow better - probably better than anyone, other than the Singaporeans. They would have been aware of this [problem] from the start."


Jim Pollard


The Nation

[Baton Rouge]

Coming from a member of the Democrat Party, this should be treated with some skepticism. But again, questions like these should always be addressed if one claims to have the greater public interest in mind. It is the job of political opposition to pose such difficult questions, even when they undoubtedly contain more than a slight element of ulterior motive.

Actions, that clearly demonstrate one's origins, speak much loader that unsupported claims. If one finds it too irksome to live with the constraint of being answerable to the public, perhaps I might suggest it would be better to forsake transactions that interfere with one's stated aims. Or perhaps better still to leave politics to those who are prepared to to live with the blow & counterblow of such no-holds-barred conflict.

http://www.nationmultimedia.com/2007/01/23/business/business_30024862.php

Still so many questions

One year after the Shin Corp scandal broke out, many questions are left unanswered, writes Korn Chatikavanij, Democrat Party member.


One year on from the historic deal between the Shinawatra family and Temasek Holdings, the official Singaporean investment arm, the fallout continues with no end in sight.


At the time, the deal represented for many the crystallisation of all the abuses of the Thaksin administration - all designed to add value to his listed companies.


The public was finally presented with a number - the now infamous Bt73.3 billion - and rightly asked how was this possible. Unfortunately, the answers were not pleasant. The deal was possible because of a series of policies designed to aid and abet Shin Corp companies, ranging from illegal amendments of concession terms to waivers of tax payments be it customs duty on imported satellite equipment to excise tax obligations on mobile phone revenues.


It was possible also because the Revenue Department sided with the family in allowing them to get away with not paying income tax in a series of transactions dating back to 1999 right up to the day before the Temasek deal itself.


It was possible because the Telecom Act was amended to allow the foreign ownership limit to rise from 25 per cent to 49 per cent - one day before the transaction.


It was possible because the Shinawatra family colluded with Temasek in setting up an ownership structure that the Commerce Ministry has subsequently concluded was illegal.


Furthermore, it may have been possible because Thaksin had always illegally owned the shares sold to Singapore and, perhaps worst of all, was in a position to make formal and informal side agreements with Singapore to assure them of future benefits related to the transaction.


Why else would the Cabinet have approved a tax incentive scheme in December 2005, weeks before the deal was announced, that debilitates its future tax revenues and primarily benefited Advanced Info Service (AIS)? Why else, indeed, would Singapore continue to show through its actions that it remains more than friendly to Thaksin, regardless of the sentiments of the current government?


Of all Thaksin's abuses, if the extrajudicial drug killings and Tak Bai atrocities symbolised his disregard for the rule of law and human rights, then the Shin Corp transaction symbolised his greed and lack of proper ethics.


Yet there remain more important questions that await answers:


1. Who really owned the shares sold to Temasek? We all know that it would have been illegal for Thaksin to have owned or controlled shares as a prime minister, and none of us believe that his son, Panthongtae, was the real owner (especially after his recent testimony to the Assets Examination Committee). Were shares of Ample Rich ever properly transferred to his son and daughter? How were the shares "bought" by Ample Rich from Thaksin ever paid for? Were the dividends received by Ample Rich from Shin Corp between 2003 and 2005 ever paid to Panthongtae? And even if they were, to whom did Panthongtae pass them on?

2. Will Temasek confirm that it dealt with Panthongtae as the decision-maker, or did it meet with either Thaksin or his wife, Khunying Pojaman, to negotiate the deal?

3. When UBS in Singapore reported to the Thai Securities and Exchange Commission (SEC) under rule 264-2 that Ample Rich had acquired additional shares, it did so because the 5-per-cent limit was triggered. However, the trigger only occurred because the Ample Rich shares were combined with another 5.4 million shares held in a private account at UBS. Did UBS do this because both blocks of shares belonged to the same owner? Why does the SEC not take a hard line on this question?

4. These same UBS private accounts bought Shin Corp shares throughout the negotiation period between Shinawatra and Temasek. Were they involved in insider trading?

5. Yingluck Shinawatra sold shares in AIS consistently between October 2005 and January 2006 at an average price of Bt105. She was subsequently a signatory to the sale to Temasek on January 23, 2006. The tender-offer price for minority shareholders of AIS was set at Bt75, and other AIS shareholders never again saw their share price as high as the price sold by Yingluck. The Stock Exchange of Thailand had amazingly said this was not insider trading. The SEC said nothing until after the coup in September, when it said it was still "investigating". Are we going to hear a result? Or will the SEC continue to see which way the wind blows?

6. The SEC controversially allowed a waiver to Temasek from tendering for shares in iTV and Shin Satellite. The SEC gave the reason that the waiver was given because Temasek was targeting AIS and not these two companies. However, regardless of intention, ownership has passed on to Temasek and one year on they have not done anything with these companies they apparently did not want. Given Temasek's intransigence on this matter, and to be fair to minority shareholders, the SEC should make Temasek conduct a tender at a price based on the transaction date of a year ago.

7. Once the courts confirm the Commerce Ministry's assertion that Temasek is illegally controlling Shin Corp, how will this issue be resolved?

Since the structure used to acquire shares from the Shinawatra family that fateful day a year ago was illegal, the courts may be in a position to rule that the transaction be declared null and void. That would mean that the shares bought from the Shinawatra family reverts back to them, and Temasek can sue the family for a return of its money. The acquisition from the investing public cannot fairly be reversed, however, and so Temasek would remain a 40 per cent-plus owner of Shin Corp - within the legal limits.


I would then hope that the unfair concession amendments that were made at the state's expanse all be reversed, with the levying of any penalties that the courts deemed fair and reasonable.


This would be a fair result - and certainly better than a scenario whereby Thaksin is allowed to get away with the ill-gotten gains from the sale, or to be in a position to acquire back shares from Temasek (as forced sellers) at a deep discount to the price received a year ago.

[GWR]

Hmm! At a rough guess, he's trying to leverage a return of complete Thai control of the military telecommunications network. The 'other assets' are probably little more than bargaining flim-flam: -

Junta leader vows to take back national assets from Singapore

Gen. Sonthi Boonyaratglin, chairman of the Council for National Security, vowed Friday to take back national assets from Singapore.

He said Thailand' assets worth Bt140 billion had been bought by Singapore and he wanted the assets to be returned to the kingdom.

"I want these assets to be returned to the country, especially satellite [concession]," Sonthi said.

He was giving a speech while chairing a ceremony to kick off the Year of Patriotism of the Army at the Army Club.

The Nation



http://www.nationmultimedia.com/breakingnews/read.php?newsid=30027038

[GWR]

Singapore seeks clarification of Thai junta leader's remarks

SINGAPORE - Singapore wants Thailand to clarify remarks made by its junta leader that he plans to take back control of satellites run by a firm sold to the city-state's Temasek Holdings, the foreign ministry said.

"Singapore is surprised at what Council for National Security Chief Sonthi Boonyaratglin was reported to have said about getting back Thai national assets which have been sold to foreigners," a foreign ministry spokesman said late Friday.

"We should wait for the Thai Government to clarify what those remarks meant."

Agence France-Presse

http://www.nationmultimedia.com/breakingnews/read.php?newsid=30027127

[GWR]

Govt downplays Gen Sonthi's remark over satellites

The government downplayed on Saturday the junta leader's latest remarks, where he stated a desire to retrieve national assets, especially satellites, sold to the city state by ousted prime minister Thaksin Shinawatra.

Government spokesman Yongyuth Maiyalarp said Gen Sonthi Boonyaratglin was just expressing his opinion.

"Gen Sonthi just expressed his opinion which I think many Thais agree. However, details have to be discussed if we really want to retrieve the satellites from Singapore to see whether it would be worthwhile. The Ministry of Information and Communication Technology will be in charge if we decide to do so," the spokesman said.

Both Yongyuth and Foreign Minister Nitya Pibulsonggram said Sonthi's remarks would not harm relations with the island state, although Nitya admitted matters were strained between the two countries.

Foreign Ministry spokesman Kitti Wasinondh said: "What Gen Sonthi said has to be taken in context. The remarks were made for that particular audience. The whole issue should just fade away."

In his speech to defence students on Friday, Sonthi said: "I want to get back the national assets that were bought for Bt140 billion, particularly the satellites."

The comments were in reference to the controversial sale of Thaksin's Shin Corp, Thailand's largest telecommunications conglomerate, to Singapore's Temasek Holdings in January last year.

"Singapore is a small country that lacks any farmland but it has rich capitalists and brokers who can buy our assets," Sonthi told military bosses and government officials in Bangkok on Friday.

"I am concerned about what was bought and I want our assets back. The satellites are one of our treasures that I really want returned. We must consider how to do this."

Singapore's foreign ministry yesterday asked Thailand to clarify Sonthi's remarks.

"The Singaporeans were surprised by the reports," a foreign ministry spokesman said, "but we should wait for our Government to clarify the remarks."

Thai-Singapore relations have strained since the sales of Shin Corp and chilled further when the deputy prime minister S Jayakumar met Thaksin in Singapore last month.

Singapore defended the decision, saying that it was simply a private lunch but Bangkok disagreed. It suspended a bilateral exchange programme and postponed high ranking visits including that of Singapore's prime minister.

The Nation

http://www.nationmultimedia.com/2007/02/17/headlines/headlines_30027146.php

[GWR]

:D Well, yes we don't want anyone having the ability to overhear our military secrets. Added to which, we probably don't want anyone overhearing some of the intrigues behind our 'sidelines' either: -

TEMASEK
Govt mulls satellite buy-back

Minister to discuss moves to regain assets with Sonthi; says ties with Singapore should not be affected

Information and Communications Technology Minister Sitthichai Pookaiyaudom will meet with junta leaders this week to discuss ways of regaining control of satellites from Singapore's Temasek Holdings.

Council for National Security chairman General Sonthi Boonyaratglin has vowed to reclaim the satellites.

"The ministry has been studying the concession for the operation of the satellites and I have yet to complete a review of this, so I cannot comment any further," Sitthichai said yesterday.

He said his discussion with Sonthi would shed more light on the move. It is unclear at this time how Thailand will proceed, he added.

He dismissed concerns that negotiations over the satellites might sour bilateral relations.

"If the two sides are willing to cooperate, then there shouldn't be any impact on bilateral relations," he said.

Sitthichai was reacting to press reports that Singapore's foreign ministry was puzzled by Sonthi's remarks on Friday and had demanded clarification.

Sonthi had said that under Thai and international law, satellites were national property that could not be bought and sold.

The sale of Shin Corp last January allowed the Singaporean company to gain control of Shin Satellite, the holder of the operating licence for ThaiCom satellites.

Government spokesman Yongyuth Mayalarp said Sonthi's remarks had voiced an opinion shared by many people.

"The public sentiment on the issue of satellites is a shared feeling among Thai people, and [Sonthi's remarks] should not be construed to tarnish relations with Singapore," he said.

Yongyuth added that if clarification were needed, it would be conveyed by diplomatic channels.

Prime Minister's Office Minis-ter Prasith Kowilaikul refused to comment before studying details of the operating licences.

"I think the issue in question is about the concession contract for the operating licence, and not relations between Thailand and Singapore," he said.

Foreign Minister Nitya Pibulsonggram said Thai-Singaporean ties were being looked at following a spat when ousted prime minister Thaksin Shinawatra visited the island-state.

Thai Rak Thai Party spokesman Sita Divari reminded Sonthi not to politicise the issue as a pretext for attacking Thaksin.

"I understand if Sonthi wants to address a national security issue, but would disagree with him should he want to smear Thaksin," Sita said.

Democrat Party deputy leader Alongkorn Pollabutr voiced support for Sonthi to repurchase the satellites.

This could be done either by raising funds via the sale of government bonds or by ordering state-controlled CAT Telecom to take over Shin Satellite, he said.

In explaining his controversial remarks, Sonthi said he had no political agenda.

"Thais see their satellites as national property and want to resume control of them," he said.

He said it was up to the government to decide how to proceed. He added that he had intended his remarks to raise the awareness of patriotism and not affect Thai-Singaporean relations.


http://www.nationmultimedia.com/2007/02/18/headlines/headlines_30027170.php

There's also an interesting reader comment: -

GeorgesHeldenstein, Luxembourg 18/02/2007 19:10

General Sonthi's position raises a number of issues. For one he seems to ignore that the satellites are not the property of Shin Satellite but of the Thai government. The shareholders of Shin Satellite finance them, without any government money, and reap the income stream they may or may not generate. In essence General Sonthi protests a free lunch. The more important issue here is whether Shin Satellite's flagship IPSTAR satellite will become a success. Such success entirely depends on signal receiver countries and receiver countries ' partner companies good will and commercial capabilities. If anything Shin Satellite needs to become more international. Shareholding in the company should be opened to partner companies, notably from China and India, the main markets. It is also quite surprising that none of Shin Satellite's directors or top managers are foreign nationals. Thai companies are still pretty clubby and virtually no foreigners grace their boards. Thai companies cut themselves out of easily accessible international experience. For a company whose success depends on foreigners, foreigners should be part of the team. Reverting Shin Satellite to more "thainess" is a recipe for failure. Thailand's image instead of being enhanced by the ownership and development of the world's most advanced satellite would suffer hugely if it failed commercially and financially. Moreover if owned by the Thai government the taxpayer, not the shareholders would be asked to pick up the tab. The Thai government may settle scores with Thaksin and Temasek but should not do so at the expense of the commercial success of Thai companies,and of the well being of their employess and their stakeholders

[GWR]

Interesting comment from a Democrat Party high-ranker. I thought it was the role of opposition [if they aren't officially an opposition right now, they damn well ought to be!] to point out situations in which the government was likely to soil the national image. Instead, we get this rather ugly thought from Alongkorn: -

Kularb Kaew case should be used to pressure Singapore: Democrat


The Democrat Party Sunday proposed that the government use the Kularb Kaew nominee case to pressure Singapore to sell concessions of five satellites back to Thailand.

Alongkorn Pollabutr, deputy Democrat leader, said the Cabinet should consider the issue of satellite concessions tomorrow and plan to hold a formal negotiation with Singapore in a friendly atmosphere.

Alongkorn said the Singapore government would like to unload 47 per cent of Shin Corp shares because Temasek Holdings now held more than 49 per cent stakes as permitted by the Thai law.

Alongkorn said the government should speed up the case of alleged use of Kularb Kaew as nominee to circumvent to Foreign Business Act to buy Shin Corp shares.

Alongkorn said the case would be a bone of contention for the government to hold a negotiation with the Singapore government over the satellite concessions.

The Nation


http://www.nationmultimedia.com/breakingnews/read.php?newsid=30027186

[GWR]

This probably heightens the suspicion that Gen. Sonthi's gung-ho comments were little more than a bargaining ploy. What do you think? Does Singapore react better to rough-house tactics or a more reasoned approach?: -

ICT Ministry considering buying back Shin Satellite

The Ministry of Information and Communications Technology is considering the possibility of buying back the country's only satellite operator Shin Satellite Plc from S'pore's Temasek, Minister Sittichai Pokaiudom said Monday.

About Bt10 billion is needed to buy back Shin Satellite Plc, which came under Temasek's control when it bought a controlling stake in the parent company - Shin Corp. Plc early last year, Sittichai said.

However, Sittichai also mentioned that it may not be necessary to buy back Shin Satellite if the company is a foreign-owned company, because its operating concession could be revoked.

The ministry plans to probe the nationality of Kularb Kaew Co., a holding company allegedly used by Temasek as a nominee shareholder of Shin Corp. in over to avoid the 49 percent limit on foreign company ownership.

However, Shin Corp. owns only 41.3 per cent of Shin Satellite, hence Shin Satellite may not be considered a foreign company even if Kularb Kaew and Shin Corp. are determined to be foreign-owned.

- The Nation

http://www.nationmultimedia.com/breakingnews/read.php?newsid=30027246

[BangkokPundit]

Interesting comment from a Democrat Party high-ranker. I thought it was the role of opposition [if they aren't officially an opposition right now, they damn well ought to be!] to point out situations in which the government was likely to soil the national image. Instead, we get this rather ugly thought from Alongkorn]

Cough party dissolution case cough. I can't blame the Democrat Party at the moment, they could easily be dissolved if they don't keep quiet. Once the case is over I hope we get an Opposition again.

[Baton Rouge]

Yes, it's interesting to note that the chances of the Democrat Party being legally wound up are actually quite high. The inquiry into their behavior is being reported, but no one seems willing to comment on it. It's almost as if folks are hoping it doesn't happen because it is such a long-established party. Personally speaking, I think the dissolution of both the Thai Ruk Thai and Democrat parties is more than warranted. I won't shed a tear over either. Let it serve as a good example to others.

But that is, I suppose, a side issue here. This report probably tells us that the junta and CNS have woken up to the fact that their ill-timed wishes for the return of the sattelite are not exactly being greeted with open arms. This really is a piece of backsliding. By surveying people on the issue, they can either take a convenient bolthole out of the issue because the public has no stomach for it (or can't be bothered to form a clear opinion on it), or they can proceed to blackmail a buyback because they 'respect' a strong public opinion in favor. Either way, they don't lose face.
http://www.nationmultimedia.com/breakingnews/read.php?newsid=30027346
Govt to carry out opinion survey on satellite concession

Information and Communications Technology Minister Sitthichai Pookaiyaudom said Tuesday that the government would carry out an opinion survey to gauge whether the public want the state to retake Shin-Satellite concession.

The survey will be carried out by the National Statistics Bureau and will take about a month to complete, the ICT minister said before attending the weekly Cabinet meeting.

"If just over 50 per cent of respondents want us to take back the concession, we will not take any action yet. We'll take action only if more than 75 per cent of respondents want us to do so," Sitthichai said.

The Nation

[Wisarut]

Capitalism - Gateway to Neocolonism? :eek:
http://www.matichon.co.th/matichon/matichon_detail.php?s_tag=01act04210250&day=2007/02/21&sectionid=0130

[GWR]

One wonders whether government employees really have much option other than to observe such a transaction and pray that it all doesn't go horribly wrong: -

Govt Pension Fund may buy Shin Satellite

Government Pension Fund (GPF) is joining up with a group of investors to buy shares of Shin Satellite Plc from Shin Corp., the fund's Secretary General Visit Tantisunthorn said Wednesday.

GPF policy is to maintain equity stake in any investments at no more than 25 percent and GPF will not take key management roles," Visit said.

Visit did not mentioned which other parties the fund is currently negotiating with.

- The Nation



http://www.nationmultimedia.com/breakingnews/read.php?newsid=30027466

[GWR]

It looks like Singapore may not be entirely lost for ideas when it comes to dealing with the Thai junta's gripes. It is probably worth remembering that they have long been accustomed to dealing with the rumbunctious likes of Malaysia's (ex-PM) Mohathir Mohamed: -

Thai push for satellites may hasten Shin Corp overhaul

Thailand's push to take over the country's satellite business controlled by Shin Corp could speed up a corporate overhaul of the conglomerate's diverse assets.

For the past three months, a Temasek Holdings-led consortium that controls Shin Corp has been mulling over a restructuring plan that will turn it into a regional mobile telecommunications player.

According to financial executives familiar with the proposed corporate makeover, Shin Corp's push to focus on telecommunications will involve the sell-off of its other assets such as its satellite operation, a television broadcasting station and finance company.

The restructuring plan, which would also feature a name change for the group, was to be set in motion after the Temasek-led consortium resolved Shin Corp's legal troubles with the government.

Now, that timetable is likely to be brought forward following Thai army chief Sonthi Boonyaratkalin's statement last week demanding that Temasek and its partners sell Shin Corp's 41 per cent interest in Shin Satellite back to the state.

Many Bangkok-based bankers, who had initially feared the possibility of nationalisation, say that the statement had the effect of helping lift the pall over Shin Corp, which has had trouble attracting suitable suitors for its assets.

'Temasek and its partners have always wanted to resolve the problems facing Shin. This is offering the shareholders a fresh opportunity,' says a Bangkok- based banker who is closely tracking developments at Shin Corp.

The sale last year by then Premier Thaksin Shinawatra's family of its stake in Shin Corp set off a political storm that led to his ouster and left Shin Corp's new owners under a cloud of political suspicion and legal problems.

But with General Sonthi's remarks about a sale, state agencies such as the Telephone Organisation of Thailand (TOT), and CAT Telecom have shown interest in buying Shin Satellite, along with Thailand's Samart Group, whose businesses include satellite-dish distribution.

Other potential suitors include investment holding companies Dragon One and Loxley, say several Bangkok-based investment analysts.

Temasek executives were unavailable for comment, but executives close to its Thai partners, which include Siam Commercial Bank and low-profile businessman Surin Upatkoon, acknowledge that the restructuring plans can now be speeded up.

Shin Satellite operates four satellites, including iPSTAR, which ranks as the world's largest broadband satellite. The company also has a large shareholding in CSLoxinfo, a leading Internet provider.

Several Bangkok-based bankers say that the sale of Shin Satellite could help Temasek and its partners find new investors for another problematic Shin investment, commercial broadcasting company iTV.

The company has been ordered by Thailand's Supreme Administrative Court to pay a concession fee of 2.12 billion baht (S$94.5 million) or risk losing its concession.

Bankers say that the Temasek-led consortium is currently holding informal talks with the Thai government to resolve the impasse over the concession fee.

Bankers close to Shin Corp say that the asset disposal plan will be capped with a change of name.

'Shin needs a re-branding, and a change of name will help shed the baggage the group is carrying,' says a financial executive close to Temasek's Thai partners.

by the Straits Times/Asia News Network

[GWR]

Thai satellite operator denies the junta's spy allegations

Thailand's Shin Satellites, under control of Singapore's Temasek Holdings, on Thursday denied the junta's allegations of spying via satellites, saying its operations are purely commercial.

Thailand's only satellite operator came under the spotlight after junta chief General Sonthi Boonyaratglin vowed to take back control of the company and accused Singapore of using ShinSat to spy on the kingdom.

ShinSat rejected Sonthi's allegations and stressed that its four satellites are only used for commercial purposes such as broadcasting and broadband Internet communication.

"Our satellites do no have any equipment to spy or do surveillance. Our operations are purely civilian," said a company official, who declined to be named.

"Our business has nothing to do with the military," she said, adding nearly 80 per cent of the company's revenue comes from international broadcasters and telecom firms.

Agence France-Presse

http://www.nationmultimedia.com/breakingnews/read.php?newsid=30027598

[GWR]

Temasek may want to sell all of Shin, says minister

Information and Communications Technology Minister Sitthichai Pookaiyaudom said he had heard the rumour that Temasek wants to dispose of all of its shares in Shin group, not only in Shin Satellite.

"Therefore, it depends on Temasek if it wants to sell only its ShinSat shares to us," he said, adding the government was expected to reach a conclusion within three months on the option to take back ShinSat's satellites.

The minister will meet next week with the panel appointed to examine the satellite concession contract with ShinSat, and whether it complies with relevant laws, as part of preparing information for a ShinSat share purchase by the government.

He said the government had to proceed carefully between the two options - buying ShinSat shares or seizing control of the satellites - as part of its attempt to regain the satellites from a foreign entity.

Telecom analysts said even if the government could prove Kularb Kaew was a nominee for Temasek to take over Shin, ShinSat would not be deemed a foreign-controlled firm. That is because Shin owns only 41.34 per cent in ShinSat.

The telecom law and foreign business law each caps the foreign shareholding in the telecom sector at 49 per cent.

But Sitthichai argued that previously Shin had owned 51 per cent in ShinSat before diluting its stake to the present level when ShinSat raised capital in 2005.

Sitthichai said the dilution allegedly did not go to Cabinet for approval.

And according to the ShinSat concession, Shin had to retain its stake in ShinSat at around 50 per cent until the concession period expired.

Meanwhile, the National Telecommunications Commission urged the government to carefully consider both the legal issues and effect on services of any move to buy back shares in ShinSat or revoke the concession for the country's sole satellite operator.

"The government needs to cautiously consider whether it is worth taking back the satellite concession," the NTC said in a statement yesterday.

The telecommunications industry regulator also downplayed concerns about the security of military communications, saying the satellites operated by the company were not meant for military purposes and most clients were foreign.

Among the key issues the government should take into account were the continuity and competency in the satellite concession's management, given the intense competition in the satellite industry, the NTC said.

"If state agencies take charge of the business, they might not be able to compete. It needs to rely on the strength of the private sector to take care of the business," the commission said.

ShinSat has four satellites in orbit, two of which are about to be retired, and only a handful of domestic customers.


http://www.nationmultimedia.com/2007/02/23/headlines/headlines_30027664.php

[GWR]

Not much of a representative sample I suppose, But I recently mentioned the possibility of a Shinsat buyback to an initially ardent Junta supporter. I was quite surprised at the ferocity of the response. All thought of a patriotic buyback was firmly rejected on the grounds that governments "don't know how to manage such things, and I want it to remain in Singaporean hands to constantly remind people of Thaksin's actions". If Bangkok people are said by some to be easily fooled by the ways of the Junta, why is it that its popularity has distinctly waned in the capital?: -

Singapore FM says "no problem" to sell Thailand's ShinSat

SINGAPORE - There is "no problem" if Thailand's Shin Satellite is sold off by Singapore state-linked investment firm Temasek Holdings, the city-state's Foreign Minister George Yeo was quoted as saying Sunday.

"If this is a commercial transaction on the basis of both sides being willing parties, then I see no problem at all. This is for Temasek to consider and for the buyers to consider whether the price is right," The Sunday Times quoted Yeo as saying.

Temasek gained control of ShinSat, Thailand's only satellite operator, when it bought a 49 percent stake in Thai telecom giant Shin Corp from the family of then prime minister Thaksin Shinawatra early last year.

Disclosures that the family paid no taxes on its windfall gains from the deals parked a scandal which triggered mass protests against Thaksin, culminating in his ouster in a bloodless coup last September.

Junta leader General Sonthi Boonyaratglin recently vowed to take back control of ShinSat and accused Singapore of using the firm to spy on Thailand.

ShinSat rejected Sonthi's allegations

In an interview Saturday with Malaysia's official Bernama news agency, Thailand's military-installed Prime Minister Surayud Chulanot appeared to distance himself from Sonthi's comments, saying the government would not get involved and it was up to Thai companies to buy back the satellites.

The Sunday Times quoted Singapore's foreign minister as saying that Thailand wanted to make sure their economy continued to welcome foreign investment.

"I think they are very conscious that whatever they do with respect to Singapore, (it) must be something which they are prepared to do with any other country, so that all foreign investors are treated equally."

Relations between Singapore and Thailand deteriorated over the past month after Thaksin held a private meeting in the city-state with Singapore Deputy Prime Minister S. Jayakumar.

After the visit, Sonthi voiced his concerns about the satellites.

On Friday night, Yeo said Singapore's ongoing diplomatic spats with Thailand and Indonesia "are not big problems" and relations overall remain good.

Agence France-Presse

http://www.nationmultimedia.com/2007/02/25/headlines/headlines_30027845.php

[Wisarut]

Well, Singaporean GHovernment said
You have to buy the whole package at the price of 80 Billion Baht or we REFUSE to sell any price lower than this! :D

[GWR]

Thaksin got out while he was still ahead, and while he still had enough assets to weather the current storm. So if he had the foresight and advisors to figure the right time to quit, why didn't he have the political savvy to deal with the waiverers in a more constructive manner? That surely is the mark of a truly-inspired politician?: -

Shin Corp profits sink by 60 per cent in 2006

Shin Corp, Thailand's top telecom firm that is at the centre of a political firestorm, said Tuesday its net profits fell by 60 per cent in 2006 due to huge drops in its mobile phone and satellite operations.


Shin Corp was founded by deposed prime minister Thaksin Shinawatra, but his family sold the company to Singapore's state-linked Temasek Holdings last year.

The politically explosive deal sparked months of street protests that eventually led to a coup against Thaksin in September. The deal is now the subject of a slate of criminal probes and remains a thorn in Thai-Singapore relations.

Shin Corp posted a net profit of 3.4 billion baht (95.5 million dollars) in 2006, compared to 8.6 billion baht (241 million dollars) one year earlier.

"The drop in Shin's earnings was mainly caused by a slump in the net profit of our subsidiaries," a company official said.

Profits of the group's flagship mobile firm, Advanced Info Service (AIS), dropped by 13.2 per cent to 16.25 billion baht because of lower service revenue as well as higher cost for sales and expenses.

AIS, Thailand's biggest mobile operator, saw its total revenue drop by 1.2 per cent amid a tough competitive environment, while handset sales rose 28 per cent to 15.3 billion baht.

The number of subscribers rose by 19 per cent, representing 3.1 million new subscribers, it said in a filing to the Stock Exchange of Thailand.

The group's satellite unit Shin Satellite Plc recorded a loss of 46 million baht last year, compared to a net profit of 1.33 billion baht in 2005 resulting from heavy losses due to write-off costs.

In October 2006, ShinSat took its Thaicom3 satellite out of service after it experienced a power failure and could no longer function.

Revenue at the satellite business, however, rose by 22.5 per cent to 6.85 billion baht.

Shin's broadcasting business, operated by ITV Plc, reported a loss of 1.78 billion baht in 2006 versus profits of 679 million baht in the previous year as a result of drop in revenue and rising costs and concession fees.

Concession fees for the independent television channel soared to 2.5 billion baht compared to 230 million baht in 2005, after it lost a court battle with the new military-backed government and was ordered to pay a mountain of back fees.

ITV's total revenue also dropped by about eight per cent to 2.15 billion baht due to intensified competition, political uncertainties and a general economic slowdown, the statement said.

Agence France Presse

[Scuba22]

He must have had his advisors, but I wouldn't place a lot of value on his "foresight". I mean, consider the buyer; Temasek created Singapore Airlines, SingTel, the Port of Singapore, and DBS - all highly competitive businesses in global markets with strong players, and in some cases, industry leaders. Not to mention the job that Singapore has done in developing its own country - the public housing system, mass transit, infrastructure, airport, education etc. (Singapore's PM, remember, is Temasek's head's husband; and the country was built by the PM's dad)

Now, consider Thaksin's track record in every single one of these areas - is there anything anywhere that might lead anyone to believe that Thaksin could possibly be more business savvy and astute than Temasek and the Singapore government? To belive that Thaksin has such amazing foresight, you must believe that Temsek is full of fools, and the empirical evidence is firmly against that.

IMHO, this points to two conclusions. First, Thaksin defrauded Temasek. Shin Corp values were artificially inflated through preferencial policy treatment that Thaksin knew could not be sustained once he didn't direct that policy (I suppose you could call that "foresight", insofar as knowing what you're going to do next is foresight). Second, Temasek was advised by idiots who couldn't figure any of this out. Goldman Sachs may have bright folks in major markets, but they clearly have no clue what's going on in Thailand.

Of course I can't prove any of this, but it's far more sensible than the idea that Thaksin is somehow a far better business strategist than Temasek - that's just absurd.

Cheers,

Scuba

[jpatokal]

Now, consider Thaksin's track record in every single one of these areas - is there anything anywhere that might lead anyone to believe that Thaksin could possibly be more business savvy and astute than Temasek and the Singapore government? To belive that Thaksin has such amazing foresight, you must believe that Temsek is full of fools, and the empirical evidence is firmly against that.
No, it isn't. Temasek's rate of return averaged out over the 30 years it's been in existence is 3%, which is miserable.

[Scuba22]

jpatokal, can you point me to the source of that 3% return figure? One thing to consider is that Temasek's original purpose was not to be a profit maximizing vehicle for Singapore, but to build strategically critical domestic industries that may not have been developed by the private sector since the market is so small. Therefore, you had a bank (DBS), a port (PSA), an airline (SQ), a utility (Sing Power), a defense contractor (Sing Tech), telecoms (SingTel), waste management (Sembcorp) and so on- in short, a complete set of municipal and national services.

The correct comparison for that would not be an investment fund, it would be a municipal or national government. On that score, having a set of public services or state-owned enterprises that returns 3% is phenomenal, wouldn't you say?

Cheers,

Scuba

[jpatokal]

jpatokal, can you point me to the source of that 3% return figure? One thing to consider is that Temasek's original purpose was not to be a profit maximizing vehicle for Singapore, but to build strategically critical domestic industries that may not have been developed by the private sector since the market is so small. Therefore, you had a bank (DBS), a port (PSA), an airline (SQ), a utility (Sing Power), a defense contractor (Sing Tech), telecoms (SingTel), waste management (Sembcorp) and so on- in short, a complete set of municipal and national services.

The correct comparison for that would not be an investment fund, it would be a municipal or national government. On that score, having a set of public services or state-owned enterprises that returns 3% is phenomenal, wouldn't you say?
Sorry, had my figure assigned to the wrong years: according to CFO Asia (http://www.cfoasia.com/archives/200411-05.htm), the 30-year RR is 18% (!), but the past decade has only managed 3%:

A second performance metric is total shareholder return (TSR) - the compounded annual return to Temasek's owner. Over the past 30 years, the group's TSR has been a healthy 18 percent per annum, a result that Temasek says is "mainly due to the small base and strong growth in the early years". More recently, TSR over the past decade has been a less impressive 3 percent, a figure heavily influenced by "the Asian financial crisis, global economic downturn, as well as external shocks from the 9/11 attacks in the US and Severe Acute Respiratory Syndrome (Sars) outbreak in Asia", says the report.

Temasek doesn't reveal what benchmarks it uses to rate this performance, but by some yardsticks the results over the past ten years have been poor. Research from CLSA shows that, while Temasek has recorded an annual TSR of 3 percent, Singapore's Straits Times Index produced 3.2 percent and the 50 biggest firms by market capitalization in Asia ex-Japan turned in an annual TSR of 8 percent. In Temasek's defence, the MSCI Asia ex-Japan Index dropped by an annual average of 2.5 percent over the past decade.

Commenting on the results, CLSA's Goyal notes that: "Eighteen percent annually over 30 years is very good for an organization which didn't set out with the objective of delivering shareholder returns. Its objective was to turn a swamp into a first-world city and in that it has succeeded handsomely." However, he adds: "Over ten years, the 3 percent return is quite low, particularly when you look at the risk-free rate of return on US government debt which was about 6 percent annually over the same period."

Remember that many of Temasek's companies -- Singapore Power (which also runs water and gas), SingTel, SingPost, Sembcorp etc -- had and, in some cases, still have government-granted monopolies. With total power to set rates, it's little surprise that they could thus generate a profit, and having that 3% (or 18%) profit just means that Singapore's people are paying at least 3% (or 18%) more than the market rate for these services!

[Scuba22]

In a tiny startup country, it's not unreasonable to have pulic services like power, post, communications, garbage collection, water, gas, etc. to be awarded monopolies at least at the beginning. These are all critical services, and you can have two problems with immediate free marketization - first, with such a small market, no one might enter, leaving the population without essential services; second, if entrants go bankrupt, again, the population is left without essential services. For that reason, you often have state-owned companie