Thaksin's Manchester City Fc Takeover Bid

[Bakuteh]

City blinded by money in race to bind Thais

Man City should think twice before accepting Thaksin Shinawatra's millions.

David Conn (The Guardian)

May 23, 2007

To describe Thaksin Shinawatra as the former prime minister of Thailand who made a lot of money in mobile phones is rather like summing up Joey Barton as an English footballer who lives in a nice house. Yet whereas Manchester City reached a clear-cut view three weeks ago that Barton's alleged assault on his team-mate Ousmane Dabo was unacceptable, the club are struggling to form a rounded opinion of the man currently dangling £100m before their eyes.

It is not difficult to find the huge questions swirling around Thaksin and his money. Google his name and you find two strands of daily news. The first is his proposed bid for City, the fairy-tale solution for a beleaguered club - he would buy City for about £27m, repay the major shareholders John Wardle and David Makin their £20m loans and provide a mooted £50m for players. The other chronicles the eight-month investigation in Thailand into alleged corruption during his five years as prime minister, which is shortly expected to deliver the first criminal charges against him.

The proceedings follow the ousting of Thaksin by a military government in a bloodless coup in September 2006 after allegations of corruption and cronyism and mass demonstrations against him in Bangkok. After taking power, the military government set up an Assets Examination Committee to inquire into the allegations and examine the fortunes made by Thaksin, his wife Pojaman and their family.

Last Monday, as Thaksin, who is living in exile in London, was stepping up his proposed bid for City, Pojaman was pleading not guilty in Bangkok's Criminal Court to charges of tax evasion and perjury arising out of a transfer of shares in the family's telecommunications company, Shin Corp, in 1997. Two of the couple's children have been hit with a tax bill for $789m (£400m), which the authorities claim is due from the sale of Shin Corp in January last year.

That sale vastly increased Thaksin's wealth but led also to his political undoing. Having been elected by a landslide in 2001 and re-elected in 2005, his government was credited with introducing some major advances including more affordable healthcare for the Thai poor but he was increasingly dogged by allegations that he was running the country in ways which financially benefited himself, his family and associates.

The anti-corruption organisation Transparency International, in its 2006 report on Thailand, said of the country under Thaksin: "Corrupt activities have become highly sophisticated, including conflicts of interest and policy-based corruption. Despite some successes, Thaksin was alleged of [sic] having absolute power, corruption, conflicts of interest, violation of human rights and using inappropriate populist policies to win the rural poor."

There are longstanding allegations of brutality and extrajudicial killings carried out by the Thai police and army in Thaksin's 2003 "war on drugs" and when putting down an insurgency by Malay Muslims in the south. Human Rights Watch and Amnesty International accused his government of failing adequately to investigate the killings, which he denied.

Then, in January 2006, Thaksin's government passed a law which removed a 25% limit on foreign ownership of Thai telecommunications companies. Days later he sold Shin Corp to the Singapore-owned Temasek Corporation, making $1.9bn (£960m). The prime minister and his family structured the sale so that they paid no tax, which further infuriated opinion in Bangkok and led to massive demonstrations on the streets.

An investigation by Thailand's Securities and Exchange Commission decided there was no illegality, but the country fell into crisis. Thaksin called elections in April 2006 which the main opposition parties boycotted and which were eventually ruled invalid. In September the military seized power.

This month the Assets Examination Committee investigators recommended that prosecutors charge Thaksin over a 2003 sale of land in Bangkok, which was owned by a fund attached to the Bank of Thailand. The investigators allege that Thaksin, then prime minister, was responsible for it and so had a conflict of interest - it was sold to his wife. Thaksin's lawyer, Noppadon Pattama, has denied that Thaksin did anything illegal and said the former prime minister would fight charges if the case went ahead.

Seymour Pierce, the merchant bank representing Shinawatra's bid, maintains that none of this affects the advisability of selling Manchester City to him. It dismisses the proceedings against him because they have been brought by a military government, which is undemocratic and not recognised by the British government. A spokesman for Seymour Pierce, which stands to make considerable fees if the deal goes ahead, said Thaksin's record had been considered:

"The information we have is that Thaksin was a successful and popular prime minister who was removed by a military coup. There are strict rules on money laundering and politically exposed persons, and we and all the professional advisers are satisfied we are able to act for Thaksin Shinawatra."

City promote an identity as a community club, proclaiming themselves "Pure Manchester" on sky-blue billboards in a 2005 advertising campaign, yet appear to see no conflict between that and proposed ownership by the former Thai prime minister. One desire currently overrides everything: money.

Having arrived with dreams in their hearts four years ago at a 48,000-seat stadium built by the local council, City have tumbled into gloom. Season-ticket sales have fallen 20%, borrowings stand at £103m and Stuart Pearce was sacked as manager after his side scored fewer home league goals last season than any top-flight club in history. Wardle and Makin, who loaned £20m mostly to finance Kevin Keegan's spending before Pearce, want out.

City announced at December's AGM that they were talking to investors, but stories of US businessmen never solidified into a bid. Ray Ranson, the former City full-back, has made a proposal backed by the private equity fund Sisu, which City refuse to entertain. The club seem to have fallen on Thaksin's bid because he is offering cash.

Some fans are dazzled by the mooted millions, but not all. Ollie Goddard, of the Manchester City Supporters' Trust, has spent days researching Thaksin and concludes: "Many of the accusations against Thaksin clearly come from the military government seeking to justify their stated reasons for mounting the coup. But we are still concerned that our club could be damaged by association with him, particularly if criminal proceedings are mounted and he is imprisoned or subjected to huge financial penalties."

From Dr Juree Vichit-Vadakan, secretary-general of the Thailand branch of Transparency International, came a plea: "Yes, we have a military government, but Thaksin was ousted after widely reported allegations of corruption, nepotism and cronyism. British people should think harder whether they want somebody to buy a football club who is surrounded by moral uncertainty. Is money always the most important thing in life?"

The answer to that question is expected from Wardle, Makin and Manchester City within the next few days.