Singapore Govt `Not Involved' in Temasek-Shin Deal

The Singapore government, which owns investment company Temasek Holdings Pte, said it wasn't involved in Temasek's takeover of Thailand's Shin Corp., a deal which has triggered protests and deepened a political crisis in Thailand.

About 1,000 protesters demonstrated outside Singapore's embassy in Bangkok today, demanding Temasek abandon its acquisition of Shin Corp. The group later marched on Thailand's Securities & Exchange Commission to express their opposition to the deal.

Temasek bought 49.6 percent of Shin Corp. from the family of Thai Prime Minister Thaksin Shinawatra on Jan. 23, and has offered to buy the remaining shares by the end of today. The controversial acquisition spurred calls for the resignation of Thaksin, who dissolved parliament and called elections for April 2. Opposition parties plan to boycott the polls.

``The Temasek deal with Shin Corp. is a catalyst not a cause. Grievances against Thaksin and his family existed long before this particular transaction,'' said Robert Broadfoot, managing director at Hong Kong-based Political & Economic Risk Consultancy Ltd. ``It has nothing to do with anything that Singapore is doing, but when you're a state-owned entity and you're moving into political environments you don't control, there's a possibility of a backlash against you.''

Anger

Critics of the deal were angered by the tax-free $1.9 billion Thaksin's family netted from the sale to Temasek, a $63 billion investment company, and by the prospect of foreign ownership of Shin Corp., which controls Thailand's biggest mobile-phone company and the nation's only satellite operator.

``The Shin Corp.-Temasek deal is a private sector deal, done purely on a commercial basis,'' the Singapore government said in a letter handed to protesters at the embassy in Bangkok today. ``It is not a government-to-government deal. The Singapore Government does not interfere in the business and operations of Temasek Holdings.''

Temasek's Chief Executive Ho Ching has been expanding the Singapore finance ministry-owned unit's holdings across Asia, investing in banks, pharmaceutical companies, telephone companies and airlines. Ho is married to Singapore Prime Minister Lee Hsien Loong, who is also finance minister.

Acquisitions

Temasek, which has a portfolio of S$103 billion ($63 billion) of investments, is offering to buy remaining Shin shares at 49.25 baht ($1.26) each, in a tender that expires today. It has also offered to buy the rest of Advanced Info Service Pcl, Thailand's biggest mobile-phone operator and Shin's biggest unit, in a tender that expires March 21.

Temasek had acquired 16.2 percent of the remaining shares in Shin Corp. as of March 2, Shin said in a statement to the Thai exchange yesterday. Singapore Telecommunications Ltd. (ST), which is controlled by Temasek, also owns about 1.08 percent of Shin.

Salee Ongsomwang, leader of the activist group Foundation for Consumers, another of the activist groups under the anti- Thaksin alliance, is also organizing a consumer boycott of Shin Corp. and its units.

Yesterday the lobbyists also threatened to expand the boycott to thousands of products linked to the premier, his ``allies'' including other ministers, and Singapore-owned companies if demands aren't met for Thaksin's resignation and Temasek's pull-out from the Shin deal.

`Fizzle Out'

``It has the capacity to damage earnings if there's a massive boycott on Shin's goods and services,'' said Spencer White, chief Asian equity strategist at Merrill Lynch & Co. based in Hong Kong. ``Does this carry on after the election? I doubt it because these types of things tend to fizzle out. I don't think the Thai consumer is any different from any consumer in Asia, and they all respond to price.''

Shares in Shin and all its units fell yesterday, including Advanced Info Service Pcl (ADVANC), Thailand's biggest mobile-phone company, Shin Satellite Pcl, Thailand's only satellite operator, and ITV Pcl (ITV), a Thai television network.

Boycott calls also apply to SC Asset Corp. Pcl, a property developer controlled by Thaksin's family, unlisted Thai AirAsia, a low-cost carrier partly owned by Shin Corp., and Capital OK Co., a consumer finance company that Shin Corp. co-owns with DBS Group Holdings Ltd. (DBS) of Singapore.

Handbook

Companies more than 25 percent owned by Singapore interests -- which include United Overseas Bank (Thai) Pcl -- face boycotts starting today if Temasek goes ahead with the Shin Corp. purchase, Salee said yesterday.

Lobbyists will distribute a handbook as early as tomorrow listing products and companies targeted by the campaign, Rosana said today.

Thaksin, who became prime minister in 2001 and won a second four-year term in February last year with a record majority, said the polls would decide Thailand's democratic future.

``The April 2 election is not a normal election,'' Thaksin told supporters today in Trat province, about 315 kilometers (195 miles) southeast of Bangkok. ``It will be an occasion for the people to decide whether they want to continue to be ruled by an elected leader, or if they are giving in to the mob rule.''

To contact the reporter on this story: Beth Jinks in Bangkok at bjinks1@bloomberg.net; Laurent Malespine in Bangkok at lmalespine1@bloomberg.net

To contact the editor responsible for this story: Bruce Grant in Hong Kong at bruceg@bloomberg.net.

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