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Thai information minister says Singapore's Temasek should not be prosecuted

Thai information minister says Singapore's Temasek should not be prosecuted

The Thai government does not want Singapore's Temasek Holdings to be prosecuted even if it broke Thailand's foreign ownership laws when it bought a stake in Shin Corp., the telecom company previously controlled by the former Thai prime minister's family, a senior Thai official said Monday.
Thai Information & Communications Technology Minister Sittichai Pokaiudom's comments in an interview with Dow Jones Newswires indicate that the divisive deal will be resolved in a way that preserves Thailand's foreign investment reputation and keeps one of Temasek Holdings Pte Ltd.'s biggest investments in the region largely intact.
"I'm not a prosecutor, but I don't want to upset the entire telecoms sector and this is also the view of the prime minister," said Sittichai, the minister responsible for the kingdom's telecommunications industry.
"Temasek must find a way to bring its shareholding to the level which is in line with the law, but the government won't pursue legal action on its part and Shin won't lose its (telecoms) concession," he said.
In January 2006, a consortium led by Temasek bought a controlling stake in Shin Corp. for US$1.9 billion from the family of former Thai Prime Minister Thaksin Shinawatra. Discontent over the deal _ seen by many Thais as allowing a foreign company to control a key telecom company _ contributed to the military-led coup and Thakin's ouster in September.
Thai laws limit foreign ownership in telecommunications companies to 49 percent.
Thailand's Commerce Ministry was investigating the nationality of Kularb Kaew Co., a holding company involved in the buyout. The ministry said initial indications showed that Kularb Kaew was actually a Temasek nominee, meaning that the Singaporean company exceeded the foreign ownership limit.
The Shin Corp. investigation is now being carried out by Thailand's Department of Special Investigations, a police branch, which is expected to give its ruling by mid-May, Sittichai said.
"The ruling will probably say that Kularb Kaew was indeed a Temasek nominee, so Temasek must act accordingly and cut its share in Shin," Sittichai said. "I hope the Thai people will accept this settlement."
Sittichai's comments are in stark contrast to his stance in February. He had told Dow Jones Newswires that the government was considering revoking Shin's telecoms concession and bringing the company back under Thai control if it was proven the Singapore's state-investment company broke Thai foreign ownership laws when it bought Shin.
The special branch reports to the Minister of Justice, who is in turn appointed by the prime minister. A special branch official declined to comment. The military has installed Surayud Chulanont as the interim prime minister.
Temasek was not immediately available for comment.
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Costas Paris is a Dow Jones Newswires correspondent in Singapore.