Thailand’s prime minister, Thaksin Shinawatra, has sown the wind only to reap the whirlwind. Rather than gloating over the tax-free Bt73bn his family has netted from the sale of its 49 per cent stake in Shin Corp, the conglomerate he founded, he is fighting for his political survival.

The demonstrations against the sale to Singapore’s Temasek could indicate the public’s demand for better governance standards. Instead, their focus seems more parochial. Disquiet at the power of the political elite to pursue its own business interests comes second to nationalist displeasure at Shin Corp’s sale to an arm of the Singaporean government.

Foreign investors’ worries are different. Despite lingering concerns over Mr Thaksin’s fondness for quasi-fiscal measures to boost growth, such as the Bt100bn mutual fund which guarantees return and principal payments, or housing loans to the poor, they have poured $2bn into the Thai stock market since the beginning of the year. However, specific aspects of the Shin Corp deal, such as the waivers Temasek received to avoid making mandatory tender offers for two of its subsidiaries, highlight once again the poor protection of minority shareholders.

Most worrying, perhaps, is the light it casts on Thailand’s pervasive use of nominee companies, which makes shareholder registers extremely opaque. Further, the questionable share dealings by Ample Rich, an offshore company which sold Shin Corp shares on behalf of Mr Thaksin and his children, were dug up not by regulators, but by the media.

Few investors can harbour illusions about corporate governance standards in Thailand. The country ranks 59th in Transparency International’s perceptions of corruption index. So far, the stock market has only wobbled as a result of the political upheaval. But Mr Thaksin should remember that, to ensure continued foreign investment, progress on corporate governance, rather than its reverse, is a must.

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