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ASSETS TRIAL

AIS won, TOT lost from change

By Nophakhun Limsamarnphun

The Nation

Published on November 27, 2009

State agency lost a large sum from amended deal, TOT officials tell court

Senior officials of state-owned TOT Plc yesterday told judges in the Supreme Court yesterday TOT had suffered a significant revenue loss due to a concession contract change by Advanced Info Services Plc (AIS), a flagship company of the Shinawatra family.

The contract was changed in 2001 during the tenure of former premier Thaksin Shinawatra.

Yesterday's hearing was part of a court move by state prosecutors to seize Bt76 billion in assets owned by Thaksin and his family. The fugitive former PM is accused of hiding his assets illegally and abusing his power while in office.

Sayan Thinsamran, a former finance director of TOT; Preeya Danchaivijit, a former assistant director; Pipat Pathumwong and Pojanee Thaijinda of TOT told the court TOT lost a significant amount of revenue from concession fees on pre-paid mobile phone services when the concession fee was reduced from 25 per cent to 20 per cent in 2001.

However, the contractual change benefited AIS, part of Shin Corp, which was later sold to Temasek Holdings of Singapore.

Besides the AIS case, former premier Thaksin has also been accused of other abuses of power while in office to benefit ShinSat, another unit of Shin Corp, by having an Export-Import Bank loan of Bt1 billion approved so the Burmese government could buy ShinSat services.

The Supreme Court is due to hear evidence next Tuesday and Thursday from four other prosecution witnesses. They are Banjerd Sinkanethi, Sak Korsaengruang, Klanarong Chantrik, and Jaruvan Maintaka.

Banjerd will tell the judges how the Thaksin government's policies benefited the Shinawatra family's business interests and allies, while Sak will give evidence about the state-owned Exim Bank's loan to Myanmar.

Klanarong will give testimony about the illegal hiding of Thaksin's assets when he held the public office, while Jaruvan will evidence about the seizure of Thaksin's assets.

All these witnesses were members of the now-defunct Asset Examin-ation Committee set up following the 2006 coup. The AEC was empowered to seek evidence from various state agencies and private entities.

Nam Yimyam, former chairman of this committee, will give closing testimony on both Tuesday and Thursday.

The final hearing for prosecution witnesses is scheduled for Dec 15, when former deputy premier Surakiart Sathirathai will be the last witness. He will give evidence about functions of the Exim Bank.

-- The Nation 2009/11/27

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[Stumbo]

"Pojanee Thaijinda of TOT told the court TOT lost a significant amount of revenue from concession fees on pre-paid mobile phone services when the concession fee was reduced from 25 per cent to 20 per cent in 2001."

OK, but was this reduction to only AIS or to any operator, or were they the only one back then? And were these reductions passed onto customers to make services more affordable or just pocketed? Would seem these issues have relevance rather that the useless TOT just whinging about lower fees for their monopoly.

[gregb]

OK, but was this reduction to only AIS or to any operator, or were they the only one back then?

Only AIS has a concession through TOT. The other carriers all have concessions through CAT, and the structure is completely different, so you can't directly compare them. And yes, all the other network operators cried foul when it happened.

The net effect of the change in rules was to make AIS much more competitive against the other operators. This is what created the clear conflict of interest. Had this renegotiation not occurred, AIS might not be the #1 mobile phone operator today, since TAC had a much better vision about the advantages of prepaid services when they negotiated their contract with CAT. TOT would not have agreed to the lower rates without political pressure, and AIS would have been forced to bear responsibility for their poor decisions.

Without interference by the government to artificially enhance AIS's competitiveness, it is likely we would see a significantly different distribution of subscribers today. That would certainly have made AIS worth alot less than 76 billion, thus, the direct correlation to the asset trial.