Temasek must sell part of Shin before April

19 Oct 2006

Singaporean state-owned investment company Temasek Holdings has said that it must sell part of its controlling stake in Thai conglomerate Shin Corp by April 2007 to avoid having trading restrictions imposed on the stock, according to a Bloomberg report. Temasek, which manages USD81 billion worth of assets for the government of Singapore, led a consortium that bought 49.6% of Shin from the family of ex-prime minister Thaksin Shinawatra in January 2006 before raising its stake to more than 96% via nominee companies, through a tender offer that expired in March. Under Thai rules, within a year of the takeover, 15% of the listed company’s shares must be restored to free float, defined as being owned by a minimum of 150 minority investors. Firms that do not meet free-float requirements face penalties including having their shares traded for just 15 minutes a day. The Bangkok-based conglomerate controls Thailand’s mobile market leader Advanced Info Services (AIS), as well as television network ITV, satellite operations and internet assets. The sale of Shin by Thaksin’s family, who legally avoided paying tax on the USD1.9 billion proceeds of the deal, sparked large-scale street protests in Bangkok and a boycott of AIS and other Shin-owned companies.

In a separate story, earlier this month the Thai commerce ministry asked the police to investigate whether Shin had breached foreign ownership limits, and a court later agreed to consider a petition to revoke operating licences belonging to AIS, Shin Satellite and ITV, on the basis that the companies are now ‘foreign controlled’. Thai law bars foreign entities from owning more than half of a telecommunications company or television network.