Anti-Graft Body Probes CAT Executives

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Anti-graft body probes CAT executives

By Usanee Mongkolporn

The Nation

The board of the National Anti-Corruption Commission has set up a subcommittee to investigate CAT Telecom chief executive officer Jirayuth Rungsrithong and CAT board directors in connection with CAT's deals with True Corp on co-developing a wireless broadband service, said NACC member Methee Klongkaew.

The move is in line with a recommendation of the Senate's corruption investigation panel, which looked into the deals.

In a related matter, the Central Administrative Court will decide on May 18 whether to issue an injunction as requested by Total Access Communication (DTAC) to prevent CAT and True from further co-developing the third-generation service on high-speed packet access service (HSPA) technology under the deals in question.

The deals have provoked questions over their legitimacy, especially if they have to be regulated by the 1992 Public-Private Joint Venture Act.

True told the court yesterday that the injunction requested by DTAC could affect its quest for a Bt49-billion loan from a group of banks to develop the HSPA service.

The court yesterday called in representatives of CAT and DTAC to be questioned in connection to the case. DTAC made a filing at the court on April 25 against CAT's board and CAT to seek a judicial review of the legality of the agreements between CAT and True group on joint investment on CDMA (code division multiple access) cellular service and HSPA wireless broadband service.

DTAC also petitioned the court to issue an injunction order to require CAT to refrain from executing the obligations under these agreements for HSPA service development, claiming that the deals are anti-competitive and might breach relevant laws.

The court yesterday asked CAT and DTAC to submit more information on May 12 tomorrow for its further consideration before it makes a decision on May 18 whether to issue the injunction.

The court will base its decision on the injunction on two factors: whether the deals signed in January had to be regulated by the 1992 Public-Private Joint Venture Act and whether the injunction would have negative effects on relevant parties.

Jirayuth told the court that the deals were to do with marketing, network leasing, and service-capacity wholesaling and resale, not a joint investment between CAT and True group. Therefore they had no need to be regulated by the joint-venture law.

CAT also said the injunction could adversely affect the state agency's business, given that both CAT and True had already signed the deals and CAT would not be able to continue to provide the CDMA and HSPA services if they didn't go ahead. The existing 1.2 million CDMA customers would also be hit.

A representative of DTAC argued that the point was the legitimacy of the deals - whether they should be regulated by the joint-venture law - and nothing to do with True and CAT businesses. DTAC also stressed that it had asked for a court injunction on the development of the HSPA service, not on maintaining the CDMA service.

Jirayuth countered that the deals were all related. Therefore, an injunction on the HSPA service could have an effect on the CDMA business as well.

As part of the deals, CAT will lease the HSPA network from BFKT (Thailand) of True's Real Future to provide wholesale and resale HSPA service. Real Move of True will also lease HSPA capacity from CAT to retail the market.

BFKT will also lease the CDMA network in 25 provinces to CAT to provide that service. CAT and Real Move already offer the wholesale and resale HSPA service respectively.

Taj Bussadeekarn, a legal expert of True, as a witness, told the court that the injunction could financially affect all related parties.

True has already borrowed Bt6.3 billion, plus interest of Bt50 million per month, from Siam Commercial Bank (SCB), for BFKT to repay its debt.

True group is obliged to repay the loan totalling Bt6.6 billion by July 27. Therefore, True sought another loan of Bt49 billion from a group of six banks to repay the SCB loan and for investment on the HSPA business. It is close to signing the loan deal with a group of six banks soon.

If CAT and True cannot continue their collaboration on the HSPA service, True's HSPA business will be disrupted and the six banks might not grant the loan to it.

Taj claimed that CAT would suffer a loss of about Bt3 billion per year from failing to provide HSPA service, while BFKT will suffer Bt923 million per year on the same reason.

He said Real Move had spent Bt210 million on the HSPA service billing system, while BFKT had spent Bt3.3 billion on the purchase of HSPA equipment.

-- The Nation 2011-05-11

[katasyd]

Wow, can't wait to go through this all over again when they release 4G.