Temasek cautiously optimistic on Thailand

The head of Temasek Holdings on Tuesday said she was cautiously optimistic that the Singapore state investment company could resolve the controversy over its recent takeover of Shin Corp, the Thai telecoms and media group.

The authorities in Thailand are investigating whether Temasek breached rules on foreign ownership when a consortium it led acquired 96 per cent of Shin Corp this year for $3.8bn.

The deal threatens to cost Temasek millions of dollars and the possible loss of operating licences that are now held by Shin Corp. The company was formerly owned by the family of Thaksin Shinawatra, the Thai prime minister overthrown in a military coup in September.

Temasek is sitting on a paper loss of about $1.5bn since it bought Shin Corp, whose share price has seen a sharp fall in the wake of of the dispute.

When asked at a Morgan Stanley investor conference about the fate of the Shin Corp deal, Ho Ching, Temasek’s chief executive, replied: “Your guess is as good as mine” – her first public comment on the issue. Ms Ho’s cautious appraisal seemed more downbeat than statements made by other government officials, including her husband, who is Singapore’s prime minister.

But she noted that Thailand wanted to bring the country back on a steady course for economic growth and development.

Thai authorities are seeking $2.6bn from Shin Corp’s television operations in a licence fee dispute, while there are suggestions that its mobile phone unit – which is Thailand’s biggest – may also be forced to pay additional licence fees.

The controversy has hurt Shin Corp’s earnings, which fell by 54 per cent to a four-year low in the latest financial quarter.

Singapore once more defended the deal on Tuesday as being in accordance with Thai laws.

Tharman Shanmugaratnam, the junior finance minister, said the acquisition “was not a reckless investment” and “was a clean transaction”.

Temasek is wholly owned by the finance ministry.

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