What's the real meaning of the Temasek deal?
See "Shin cleared but NTC is still cautious" (business, front page)
By Jon Fernquest
[Introduction|Vocabulary|Article]
[Reading Questions|Answers]
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"The tax-free sale of Shin by the family of the Prime Minister spurred considerable resentment among middle-class voters, with protesters claiming the transaction violated numerous laws. Pressure from the protests eventually led to Mr Thaksin's decision to turn down a third term."
Have people forgotten what caused the protests to become so big? Would forgetting about it for a while, or at least not making it first priority, be a good thing? Some questions:
1. Are the protests bad for the Thai economy right now?
2. What's more important at this stage, political change or economic health?
3. If the courts are taking care of things then is there really a need for more protests?
4. Should Thai businesses be looking for more overseas investment opportunities like Temasek did? Singapore's economy may have more wealth than Thailand, but Thailand's economy is wealthier than neighboring countries.
5. What is the real meaning or meanings of the Temasek deal?
a. Foreign domination of Thai industries?
b. Thailand should start imitating Temasek and make foreign investments too?
c. Too much globalisation?
d. Too little globalisation?
Reading Questions
Here are some questions to guide your reading (See answers at end):
1. How much money was Shin Corp sold to Temasek for?
2. Which regulatory agency cleared Shin Corp of all wrongdoing?
3. What does this regulatory agency want to prevent in the Thai telecommmunications industry?
4. What regulations are being proposed to prevent it?
5. What interests have to be balanced in these laws?
6. What aspects of the deal led to anger among middle class voters?
7. What did the protesters claim about the Temasek deal?
8. What did the protests eventually lead to?
For further reading, Wikipedia has some informative articles in English:
1. Thaksin Shinawatra $1.88 billion deal controversy
2. Thaksin Shinawatra
Article
Shin cleared but NTC is still cautious
New framework due for foreign ownership
KOMSAN TORTERMVASANA
The National Telecommunications Commission (NTC) says the 73-billion-baht Shin Corporation-Temasek deal did not breach existing regulations and laws, including those related to foreign ownership.
However, the national telecoms regulator said it would establish a new framework to effectively prevent future foreign domination of the Thai telecom industry.
NTC secretary Suranant Wongwittayakamchorn said the NTC had sought legal clarifications from various government agencies on the status of Shin Corp after it was taken over by Singapore's state-owned Temasek Holdings in January.
He said the most significant point that the NTC wanted to clear up related to foreign domination.
Agencies contacted by the NTC included the Information and Communications Technology Ministry, the Finance and Commerce ministries, TOT Plc, the Stock Exchange of Thailand and the Securities and Exchange Commission.
He said the agencies had clarified that the Shin deal did not breach any existing regulations or laws. They also said that the earlier takeover by Norway's Telenor of United Communication Industry met all requirements.
He said the NTC board would meet again tomorrow to discuss further action.
But Mr Suranant said that although government agencies had cleared the Shin-Temasek deal, the NTC as a regulator was obliged to protect the interest of the Thai people as a whole.
"This means that we will have to go into more detail in drafting a new framework to prohibit foreign domination in the Thai telecom industry," he said.
He said that although draft regulations to prevent foreign domination had undergone public consultation, further consultation was needed.
He added that the NTC needed to be careful not to create any conditions that would disrupt foreign investment, while also protecting the interests of the general public and national resources.
He said that the NTC would try its best to push the draft though as it anticipated that more foreign investors would apply for telecom licences in the future.
He explained that further regulations would come under a new Competition Code framework, which the NTC had already drafted but was yet to complete.
The tax-free sale of Shin by the family of the Prime Minister spurred considerable resentment among middle-class voters, with protesters claiming the transaction violated numerous laws. Pressure from the protests eventually led to Mr Thaksin's decision to turn down a third term.
Tax officials have cleared the Shinawatra family of any wrongdoing, while securities regulators have only assessed fines against Panthongtae Shinawatra, Mr Thaksin's son, for minor disclosure violations.
The SET also announced that a probe into possible insider trading in the months leading up to the Temasek deal had found no wrongdoing by major Shin shareholders, directors or management.
Vocabulary (in article)
framework - set of rules to deal with a problembreach a regulation or law - break the law
foreign domination in the industry - the most important companies in the industry are foreign
legal clarifications - making the meaning of a law clearer
disrupt foreign investment - doing something that frightens foreign investors so they take their money out of the country
drafting - writing the first version that will later be improved and rewritten
public consultation - when the public is asked for their opinion on a draft law
interests - people who gain or lose from the law, people who are affected by the law
push the draft through - have parliament make the draft law into a real law
tax-free sale - pay no tax on the sale
spurred considerable resentment - made people feel very angry
middle-class voters - voters who are not rich, yet not poor, in the middle
cleared of wrongdoing - the government agency has decided they didn't break the law
assessed a fine - the government agency decided they had to pay a fine because they broke the law
minor disclosure violations - they broke the law because they did not make some information public that has to made public by law
a probe - investigation, looking closely at events to see if there is a problem
Answer Key:
1. How much money was Shin Corp sold to Temasek for?
Shin Corp was sold to Temasek for 73-billion-baht ($1.88 billion).
2. Which regulatory agency cleared Shin Corp of all wrongdoing?
The National Telecommunications Commission (NTC).
3. What does the regulatory agency want to prevent in the Thai telecommmunications industry?
Domination of the Thai telecommunications industry by foreign companies.
An NTC official stated that, "the NTC as a regulator was obliged to protect the interest of the Thai people as a whole. This means that we will have to go into more detail in drafting a new framework to prohibit foreign domination in the Thai telecom industry."
4. What regulations are being proposed to prevent it?
Regulations that prohibit foreign domination of the Thai telecommunications industry. These regulations will be part of a new "Competition Code" that the NTC is drafting.
5. What interests have to be balanced in these laws?
The interests of the Thai public and foreign investors.
The NTC stated that the interests of the Thai public have to be protected without disrupting foreign investment. The NTC anticipates that "more foreign investors would apply for telecom licenses in the future."
6. What aspects of the deal led to anger among middle class voters?
The tax free sale of Shin by the family of the Prime Minister "spurred considerable resentment among middle-class voters." "Resentment" means "bitterness and anger."
7. What did the protesters claim about the Temasek deal?
Protesters claimed that the "transaction violated numerous laws."
8. What did the protests eventually lead to?
"Pressure from the protests eventually led to Mr Thaksin's decision to turn down a third term."
