SINGAPORE: Temasek deal strictly commercial, S'pore Govt tells senator

Thai senator questioned Thaksin family profit, conflicts of interest

Straits Times
Sunday, March 26, 2006

The Singapore Government has responded to a Thai senator's concerns about Temasek's purchase of Shin Corp, reiterating that its transaction with the Thai conglomerate was strictly a commercial deal.

Senator Kraisak Choonhavan, chairman of the Thai Senate Committee on Foreign Affairs, had written earlier this month to Prime Minister Lee Hsien Loong and Speaker of Parliament Abdullah Tarmugi, expressing his reservations about the Shin Corp-Temasek deal.

Among other things, he cited possible irregularities in the transaction, which saw Prime Minister Thaksin Shinawatra's family selling its stake in Shin Corp for US$1.9 billion (S$3.1 billion) in January.

Since then the sale has been engulfed in controversy amid a wider campaign by opponents of Mr Thaksin to remove him from power.

Critics accuse the Premier of dodging taxes on the sale, of improperly using nominee companies and of allowing a foreign company to acquire Shin Corp's satellite operations, which they deem to be strategic assets.

Massive rallies have been held to demand Mr Thaksin's ouster, and protests have also been held outside the Singapore Embassy in Bangkok to press for the sale to be rescinded.

In his letter, Senator Kraisak reiterated some of the protesters' objections concerning the transaction, such as the perceived lack of transparency and possible conflicts of interests.

He went on to express concern about 'the potential effect the ongoing mass protests...will have on the good relations between our two countries'.

Responding to the senator on behalf of PM Lee, Singapore's Ambassador to Thailand Peter Chan said that the points raised by him have been noted and that Singapore shared his concern about the impact on bilateral ties.

Mr Chan added: 'Our overall stand on these issues is that Temasek and any other Singapore company that invests in Thailand must comply with all Thai laws and regulations, including any rules that are put in place to safeguard Thailand's national security.

'This is what we believe Temasek is doing, and we do not expect any special exemptions or privileges for it.'

Mr Chan observed that Singapore has enjoyed a 'close and warm relationship' with successive Thai governments, including those under General Prem Tinsulanonda in the 1980s, and Mr Anand Panyarachun in the 1990s.

Bilateral cooperation such as the push to set up the Asean Free Trade Area, first mooted by Mr Anand, has continued to grow over the years, the ambassador added.

'More recently, Singapore participated in relief efforts in the aftermath of the 2004 tsunami which affected parts of Thailand. We are also deeply appreciative of the gracious and warm reception accorded to President S R Nathan when he made the first state visit to Thailand in January last year,' he said.

Mr Chan also said that Singapore companies like Temasek are keen to make long-term investments, not just in Thailand but also in other economies around the region. 'We share their confidence in Thailand and the region,' he said.

In his response, Mr Tarmugi reiterated recent remarks made by Prime Minister Lee that the purchase of Shin Corp by Temasek, a Singapore investment company, is a commercial decision.

'Singapore companies are of course expected to abide by local laws when conducting their business and investments in Thailand,' said Mr Tarmgui.

The Speaker also referred to Mr Lee's comment that Singapore companies are encouraged by the Government to go regional as a way of strengthening economic ties and investment confidence in the region.

'I am confident that people-to-people relations between Singapore and Thailand, as well as our close economic cooperation, will be further enhanced,' he added.

Date Posted: 3/26/2006