Thai unrest thwarts Temasek’s business plans

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Shin corpThe plan of Singapore’s state investment holding Temasek to sell its shares in Thailand’s Shin Corporation, which has been acquired from the family of Thailand’s ousted former prime minister Thaksin Shinawatra in 2006 for $1.88 billion, has been put on hold due to continued political tension in Thailand.

Temasek originally sought to sell its 41.6-per cent share for $3.1 billion and had identified Singapore’s telecom giant Singtel as possible buyer, people familiar with the matter said according to a Reuters report. The Temasek stake in Shin Corp is worth $3.1 billion by current market value. Shin Corp’s shares now trade more than 50 per cent above the price paid in 2006.

Shin Corp owns 40.5 per cent of Thailand’s biggest mobile telecoms company, Advanced Info Service (AIS).  SingTel already has a 23 per cent stake in AIS. Adding the Shin Corp stake would cement its position in a bigger market and offset sluggish growth in mature economies where it’s also present, like Australia.

The sale of Shin Corp by the Shinawatras has caused great controversy in Thailand. The sale was in response to long-standing criticisms that the Shinawatra family’s holdings created a conflict of interest for Thai Prime Minister Thaksin Shinawatra. Critics of the sale focused on allegations directed toward Thaksin and a compliant government that the transaction was exempt from capital gains tax, the fact that the Thai company was sold to a Singaporean company, and the fact that the Thai law regarding foreign investments in the telecom sector had been amended just prior to the sale.

The change in its ownership also triggered accusations of insider trading and tax evasion as the family of then Prime Minister Thaksin Shinawatra and others involved received $1.88 billion tax-free.

The slowdown in Shin Corp deal talks makes it the second potential transaction in Thailand to be put on the back burner due to political stalemate. ING Group’s planned sale of a 31 per cent stake in TMB Bank has also hit roadblocks, Reuters previously reported.

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Reading Time: 2 minutes

The plan of Singapore’s state investment holding Temasek to sell its shares in Thailand’s Shin Corporation, which has been acquired from the family of Thailand’s ousted former prime minister Thaksin Shinawatra in 2006 for $1.88 billion, has been put on hold due to continued political tension in Thailand.

Reading Time: 2 minutes

Shin corpThe plan of Singapore’s state investment holding Temasek to sell its shares in Thailand’s Shin Corporation, which has been acquired from the family of Thailand’s ousted former prime minister Thaksin Shinawatra in 2006 for $1.88 billion, has been put on hold due to continued political tension in Thailand.

Temasek originally sought to sell its 41.6-per cent share for $3.1 billion and had identified Singapore’s telecom giant Singtel as possible buyer, people familiar with the matter said according to a Reuters report. The Temasek stake in Shin Corp is worth $3.1 billion by current market value. Shin Corp’s shares now trade more than 50 per cent above the price paid in 2006.

Shin Corp owns 40.5 per cent of Thailand’s biggest mobile telecoms company, Advanced Info Service (AIS).  SingTel already has a 23 per cent stake in AIS. Adding the Shin Corp stake would cement its position in a bigger market and offset sluggish growth in mature economies where it’s also present, like Australia.

The sale of Shin Corp by the Shinawatras has caused great controversy in Thailand. The sale was in response to long-standing criticisms that the Shinawatra family’s holdings created a conflict of interest for Thai Prime Minister Thaksin Shinawatra. Critics of the sale focused on allegations directed toward Thaksin and a compliant government that the transaction was exempt from capital gains tax, the fact that the Thai company was sold to a Singaporean company, and the fact that the Thai law regarding foreign investments in the telecom sector had been amended just prior to the sale.

The change in its ownership also triggered accusations of insider trading and tax evasion as the family of then Prime Minister Thaksin Shinawatra and others involved received $1.88 billion tax-free.

The slowdown in Shin Corp deal talks makes it the second potential transaction in Thailand to be put on the back burner due to political stalemate. ING Group’s planned sale of a 31 per cent stake in TMB Bank has also hit roadblocks, Reuters previously reported.

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