Telenor is seeking local partners to take a stake in its Thai mobile subsidiary Digital Total Access Communications (DTAC), reports local newspaper The Nation quoting a source close to shareholders of United Communication Industry (UCOM), a company through which the Norwegian telco holds part of its interest in DTAC. According to the source, Telenor is looking to sell a stake in Thai Telco Holdings, a part owner of UCOM, to financial institutions or other investors to avoid falling foul of a law limiting foreign telecoms ownership to 49%.
According to TeleGeography’s GlobalComms database, DTAC is owned by UCOM (41.64%), Telenor (32.9%) and CAT Telecom (0.11%); the remainder is publicly traded. Telenor Asia and its local affiliate Thai Telco jointly own 86.3% of UCOM’s shares, giving Telenor an overall economic exposure in DTAC of 69.3%. Legal loopholes have allowed Telenor to sidestep the foreign shareholding limit through locally registered nominee companies. However, in March 2006 regulator the NTC drafted a law designed to tighten up the legislation, and the government has since come under increasing public pressure to investigate all companies with apparent foreign nominee ownership. Thai Telco is among 13 companies under investigation by a Commerce Ministry committee for possible violations of the law. The probe started with an examination of the takeover of Shin Corp in January 2006 by Singapore’s Temasek Holdings. Owners of companies defined as nominees for foreign interests could face fines or even imprisonment.