Temasek hints at cutting Shin Corp stake

16 Oct 2006

Singapore’s Temasek Holdings says it may reduce its stake in Thailand’s telecom giant Shin Corp in a bid to resolve a dispute over its alleged violations of Thai ownership rules. The Thai authorities plan to investigate whether the Singapore state-backed holding company’s takeover of Shin Corp, the telecom group set up by ousted premier Thaksin Shinawatra, broke any laws. The Shinawatra family sold its 49% holding in the company to Temasek for USD1.9 billion in a tax-free deal in January 2006. The move, however, sparked months of protests and claims of corruption which ultimately resulted in Thaksin Shinawatra being booted out in a bloodless coup on 19 September. Under Thai rules, foreign investors can own up to 49% of a telecom company, but questions remain over whether other local entities acted on Temasek’s behalf. Temasek now says it may reduce its holding in Shin Corp to 49% in a bid to settle the issue.