Thaksin Sells Shin Corp Stake For Bt80 Billion

Jai Dee · January 27, 2006

REVENUE DEPARTMENT / GROWING CONCERNS

Tax officials admit Shin case has upset public

The Revenue Department acknowledges growing concern that Thai people will no longer pay taxes after a storm of criticism over the tax-free sell-off of Shin Corp shares by the Shinawatra and Damapong families.

''The department has encouraged Thai people to pay tax. And this is the time [of year] for personal income-tax payment. We worry that taxpayers might misunderstand that case. So we are here to clarify the issue,'' Sirote Swasdipanich, the department's director-general, said at a press conference yesterday.

Mr Sirote acknowledged criticisms of the Shin deal but said that everything had been handled to a high standard and without any discrimination.

The Revenue Department is responding to the current public discontent with a 100-million-baht campaign to encourage tax payment.

Under the law, there is no tax on capital gains from the sale of shares through the stock market. Mr Thaksin has said that his family's sale of shares to Temasek Holdings of Singapore _ at 73.3 billion baht, the largest share transaction in Thai history _ was in full compliance with the law.

However, critics have pointed out that before he took the premier's office, Mr Thaksin had originally transferred his shares to his children and sister Yingluck at prices below their market value. The transfer was in line with a constitutional requirement that politicians be free from business interests.

At the time, that deal was exempted from capital-gains tax even though the transactions were made outside the stock market. Tax payments could not be applied on a cash basis because profits and losses were not realised, officials concluded.

However, critics have questioned how a capital gain _ the difference between the buying and selling prices _ could be calculated in the Temasek transaction if no cost was realised in the original intra-family transfer.

Paitoon Pongskasorn, the department's deputy director-general, said that in such a case, the seller could realise the cost of the first transaction when selling the shares in the stock market. As a result, there would be exemptions from capital gains tax in both transactions.

The Securities and Exchange Commission insisted that it did not apply any double standards in the Shin-Temasek deal.

The SEC said it spent a month considering the question of whether to waive the requirement for a tender offer for Shin subsidiaries Shin Satellite and iTV for Temasek. SCB Securities, the financial adviser for the deal, had sent the original takeover proposal for SEC consideration on Dec 23.

Regulators pointed out that a tender offer was still required for Advanced Info Service Plc (AIS), because it generated more than 50% of Shin's total revenues.

Chalee Chantanayingyong, a senior secretary-general of the SEC, said officials had reviewed five similar cases and three resulted in waivers of tender offers for subsidiaries.

''The consideration and approval were transparent. We have a takeover panel to work on this issue,'' he said.

The SEC insisted that members of the takeover panel did not have any conflict of interest when considering the Shin case. Two of the five committee members were from Phatra Securities and Trinity Securities, which were involved in Shin share trading order execution.

''We have to have 15 committee members. Each case will use five of them, with members rotated from time to time. They don't know in advance which case they will consider,'' Mr Chalee said.

Source: Bangkok Post - Friday January 27, 2006

sriracha john · January 27, 2006

Very disappointing news just report on Nation TV channel:

Results of a just released ABAC Poll found that 74% questioned were unaware that no tax was being paid on the Shin sell-off.

Ugggghhhh.... how frustrating.

c'mon Thailand... GET INFORMED!....

you're gonna be stuck with this guy until you do...

Jai Dee · January 27, 2006

Analysis: Complex transaction a model for avoiding tax, ownership law

The Temasek-Shin Corp deal was structured to be complicated and achieve two objectives: Enable the parties to avoid transaction taxes and keep Shin’s foreign shareholding within the statutory limits. It has long been known that Advanced Info Service Plc (AIS) is the jewel in the Shin crown.

Singapore Telecommunications had appeared to be the most promising partner for Thailand’s biggest mobile-phone firm. Yet, when it showed up in 1999, it could buy only 19.26 per cent of AIS as the Shinawatra family was not willing to relinquish control of the company at the time.

Seven years later though, and the family was ready to part ways with the telecom giant. But a restructuring of the family business meant the Shinawatra clan now controlled AIS through their holdings in Shin. Thus, it was Shin that would need to sell its 42.86 per cent stake in AIS.

The problem was company-to-company transactions are subject to tax. So it was necessary to have all five members of the Shinawatra and Damapong families sell their combined 49.6 per cent stake to Temasek Holdings because individual transactions are not subject to tax.

As Prime Minister Thaksin Shinawatra noted, Shin is not a dessert. Given its size, it was not going to be easy to find a buyer with deep-enough pockets to purchase it.

That might explain why the Securities and Exchange Commission relieved Shin’s buyers of the obligation to make a mandatory tender offer for all the holding company’s listed subsidiaries.

Together with the Bt73.3 billion paid out yesterday, the buyers need to come up with another Bt79 billion for the remaining shares of Shin. Though a tender also had to be made for AIS shares, it is clear from the low price it offered that Temasek does not want to buy the remaining shares in the company.

The deal could thus be completed with an investment of Bt154 billion. If it were to tender for Shin Satellite and iTV, the cost of the transaction could have swelled to over Bt280 billion. That is a huge amount of money, equal to nearly 10 per cent of Temasek’s investment portfolio of S$103 billion.

It becomes understandable then why the legal infrastructure needed to be in place to ensure that the buyer could afford to purchase Shin, otherwise the hard-to-find investor might have walked away.

In a similar fashion, the Telecommunications Act needed to be amended for the transaction to be completed. As a result of the amendment, the foreign shareholding limit in a Thai telecom firm was raised from 25 per cent to 49 per cent.

However, as some Shin shares were already in the hands of foreigners, the 49.6 per cent stake to be sold to Temasek would still have lifted Shin’s foreign ownership above the statutory limit.

That explains the emergence of a number of nominees on the scene. Aspen Holdings, Cedar Holdings and Kularb Kaew were established two weeks before the deal was to be done. Although Kularb Kaew is owned 51 per cent by two Thai investors, one of them, Pong Sarasin, has already admitted he is just a proxy. Pong and Supadet Poonpipat’s holdings were simply Temasek’s attempt to make Kularb Kaew a Thai company.

Still, as a Thai company, Kularb Kaew together with Siam Commercial Bank, hold a combined 51 per cent of Cedar, making Cedar a Thai company. As a result, despite Cedar’s holding of 38.6 per cent in Shin, the foreign shareholding limit in Shin was not breached.

An investment banker said that no matter which securities firm had been hired to handle the deal, a similar legal structure would have been employed, as it shields the sellers from tax and legalises Temasek’s holding in Shin.

While the deal may be legal, the public is still questioning the morality of the share transfers.

It might not be surprising when businessmen employ such legal manoeuvring to circumvent what can be regarded as the spirit of the law – but when it’s the family of the prime minister, who is supposed to be the first to uphold the laws, serious questions must be asked.

Source: The Nation - January 27, 2006

Jai Dee · January 27, 2006

DR.SURAPONG SAYS IT’S NORMAL FOR THE CRITICISM OVER SALE OF SHIN CORP SHARES

Government Spokesperson SURAPONG SUEBWONGLEE (สุรพงษ์ สืบวงศ์ลี) spoke about the matter where several parties are trying to investigate on the sale of Shin Corporation Public Company Limited shares to Temasek Holdings of Singapore which is worth of 73 billion baht.

He added that the situation is so normal since the public figures are usually investigated on such performances.

Dr. SURAPONG said that Finance Ministry and Securities and Exchange Commission (SEC) should disclose the information they have as the government is unable to clarify the matter since it has no details.

Source: Thai National News Bureau Public Relations Department - 27 January 2006

Rinrada · January 27, 2006

xbusman · January 27, 2006

I know my employees are all informed about the lack of taxes on this deal. Overall, they are really angry at this whole thing, I think he might have gone too far this time. It was a bit over the top, given their general indifferance over who is currently on top and stealing, this seems to have gotten through.

sua yai · January 27, 2006

My wife and her friends who are always reluctant to talk politics are now doing so and it's not very complimentary to say the least.

Trying to look at things positively "maybe we won't get fooled again?".

Dream on.

ratcatcher · January 27, 2006

The man with all the money has his head so far up his ass that it's impossible for him to be aware of public sentiment regarding anything he does. He's surrounded by sycophants and toadies and has truly lost the plot.

He believes his own lies and expects others to see things his way.

As pointed out in The Nation today, had he used the money that he avoided paying in taxes, he could have completed the BTS system and maybe the citizens of Bangkok may have forgiven him.

The tragedy is that the average Thai is so busy trying to scrape by that they have no time to ponder the finer details of The Rich man's wealth.

Edited January 27, 2006 by ratcatcher

skippybangkok · January 27, 2006

New Term

"Tax-sin"

dan10400 · January 27, 2006

I have a thai contact in the revenue department. at the current

time, tax compliance is pretty poor to say the least. many people

are not even in the revenue department system, and none of the

government systems talk to each other. for example, a thai goes

and buys a home - no questions asked. hand over the property

tax and it is yours. doesn't matter their company business hasn't

paid ever.

Now the big fear is coming on two fronts. There is a big rush of

people to do the same thing - transfer shares to their relatives

and either avoid paying taxes, or paying much less taxes. Then

there will of course most likely be an spike non-compliance as

it seems like everybody really does get away with it.

I am curious if anyone knows how Thaksin will take money back

from his kids. Is this also a tax-free transaction (as a gift)?

Not to belittle the tax issue, but the biggest can of worms that has

been opened up looks to be in the capital markets. I think the

implications of those shenanigans could be felt for a long time as

it affects domestic as well as foreign investors.

regards,

--dan

Heng · January 27, 2006

Yeah, the gov't needs more funds from personal income tax to squander. That VAT tax isn't keeping the fat cats fat enough.

I got dibs on the first H & R Block franchises. Scratch that. Let's just make it H & R Heng and save on the royalties.

Probably an alien concept to a lot of folks on this board, but the individual and the family is often one and the same in a good number of families here. Also, for those same folks, it's not necessary for each generation to spend and liquidate everything they have earned, but instead to pass it down to the next generation.

penzman · January 27, 2006

A good Thai friend of mine used to whisper when we talked politics at his desk, I thought it was strange at the time, being new here. He now translates out loud for me the newspaper headlines and articles.

He now realises HE is paying taxes.

sriracha john · January 27, 2006

Thanks xbusman... I'm glad all your employees know about it and are justifiably upset....that gives hope after hearing about that poll. It restores a bit of faith in the future.

Thank you for that pick-me-up...

I know it's difficult to remain positive and hopeful about the future, but your wife and her friends have taken the first big step... acknowledging the problem. I would encourage that..

Congratulations and a big to all of them.

sriracha john · January 27, 2006

The shady scam just gets dirtier and dirtier.... Un-frickin-believable:

SHIN CORP SHARE SALE: The Ample riddlePublished on January 28, 2006

Accusations of insider trading arise as experts suggest Thaksin’s children must have known about the deal beforehand.

A murky stock deal between Ample Rich Investments Co (an appropriately-named Company?) and two of Prime Minister Thaksin Shinawatra’s children has become a political hot potato for the Finance Ministry, the Bank of Thailand, the Securities and Exchange Commission, and the Stock Exchange of Thailand.

“I don’t know, I don’t know,” said Finance Minister Thanong Bidaya in response to a question whether the Finance Ministry would probe the suspicious deal between Ample Rich Investment – allegedly a nominal offshore company of Thaksin – and Pinthongta Shinawatra and Panthongtae Shinawatra.

Last Friday, Ample Rich, registered in the British Virgin Islands and headquartered in Singapore, sold 164,600,000 shares in Shin Corporation to Pinthongta and another 164,600,000 shares to Panthongtae for Bt1 apiece.

The following Monday, Pinthongta and Panthongtae resold their newly bought stocks to Tamasek Holdings of Singapore for Bt49.25 a share as part of a Bt73.2-billion takeover of Shin Corp. Pinthongta and Panthongtae earned a profit of Bt48.25 a share on this deal, totalling tax-exempt proceeds of Bt7.94 billion each.

Financial sources questioned yesterday whether the transactions had violated the securities law relating to insider information, or Article 241.

“They had to know the deal would take place on January 23, otherwise they would not have bought the shares on January 20 from Ample Rich,” a financial source said.

On Monday January 23, Karnjanapha Honghern , a secretary for Khunying Pojamarn Shinawatra,

informed the SEC that Ample Rich had sold 164,600,000 shares of Shin Corp to Pinthongta and Panthongtae each, totalling 392,200,000 shares. She also acted on behalf of Pinthongta and Panthongtae by informing the SEC that the two shareholders had bought the stocks from Ample Rich through the Stock Exchange on Friday January 20.

As it has subsequently transpired, however, there is no report at all about the transaction between Ample Rich and Pinthongta and Panthongtae allegedly conducted on the exchange either through the foreign board or through big-lot transaction.

“The SET has told the SEC that there has been no transaction of this deal. It is the responsibility and authority of the SEC to investigate [Karnjanapha’s claims] further,” a SET source said.

Chalie Chanthanayingyong, an assistant secretary-general of the SEC, said the SEC was looking to the matter.

Questions have also been raised about the ownership of Ample Rich.

Experts cannot help wondering if it is owned by the Shinawatra family. Financial sources note that no other explanation would account for the highly questionable decision by Ample Rich to offload its Shin stocks to Pinthongta and Panthongtae at a mere Bt1 per share just when the stocks were trading at Bt47-Bt48.

However, Thaksin’s declaration of his assets to the National Counter Corruption Commission does not mention Ample Rich on the list of his assets.

Apparently, Thaksin set up Ample Rich Investments Ltd on 12 April 1999 in the British tax haven of the Virgins Islands ahead of his plans to enter politics in full force.

On 11 June the same year Ample Rich Investments Ltd bought 39,260,000 shares, about 10.97 per cent, of Shin Corp through big-lot transaction at the Stock Exchange of Thailand. There was no evidence that Thaksin received any money from selling the big-lot stocks to Ample Rich.

Boonklee Plangsiri, chief executive of Shin Corp, notified the Stock Exchange that there would be no change in the ownership structure of Shin Corp with Thaksin’s reduction of his stake from 23.75 per cent to 11.88 per cent. The reason was that the balance of 11.88 per cent had been transferred to Ample Rich Investments, which was fully owned by Thaksin, Boonklee explained in his notification to the Stock Exchange.

The Ample Rich transaction was publicised after the deal had been done, raising suspicions that Thaksin’s son and daughter had taken advantage of inside information and violating market rules. The issue was being investigated by the SEC, Chalie said on Thursday.

Korn Chatikavanij, a Democrat MP, said he wondered how Thaksin had managed to siphon money out of the country in the first place in order to set up Ample Rich in the British Virgin Islands. Korbsak Sabhavasu, another Democrat MP, called on banking authorities to investigate the cash flow of Ample Rich.

When MR Pridiyathorn Devakula, the central bank’s governor, was asked about the allegation, he replied: “I don’t know because it happened before my tenure.”

According to central bank regulations, a commercial bank may execute a transaction worth up to US$10 million for a client who wishes to invest in more than 10 per cent equity of a foreign company. If the transaction is more than US$10 million, the client must get special permission from banking authorities.

This rule is imposed in order to manage capital movements, preventing them from affecting the Thai exchange rate.

Meanwhile, Krirk Vanikkul, assistant central bank governor, said it was not the duty of the central bank to trace the flow of money in the Shin deal. If this were to be done, it would be the responsibility of the Money Laundering Office or the Revenue Department, he said.

=======================================

penzman · January 28, 2006

" Those involved and those trying to cover up the latest scandal will all receive a complimentary *prize which will provide hours of fun while incarcerated for tax evasion and more crimes to be uncovered! Coming soon to a justcice court near you!"

*Actual potato size is bigger than appears on package

Jai Dee · January 28, 2006

Concealing shares: is this Part II?

Ample Rich Investments. Remember this name, because Prime Minister Thaksin Shina-watra’s apparent political omni-presence may depend on it. Whereas he, his family members and close associates initially seem to have got away with the Bt73-billion sale of Shin Corp to Singapore’s Temasek Holding without having to pay any tax, discovery of Ample Rich Investments’ dubious role in the deal could change everything. And repercussions can go far beyond the issue of whether enormous taxes have to be paid.

“This is Share Concealment: Episode 2,” said the Democrat Party’s Korbsak Sabhavasu, whose earlier warning about the existence of Ample Rich Investments had fallen on deaf ears.

This much is known: it was registered in the notorious British Virgin Islands in 1999, and in 2000 it was officially confirmed that Thaksin owned it. The firm was based in Singapore. It bought a big lot of Shin shares from, strangely, Thaksin on June 11, 1999. Then on January 20 this year, it sold all 329.2 million Shin shares to Pinthongta and Panthongtae Shinawatra at Bt1 per share. The big transaction was not reported to the stock market.

Why was Ample Rich Invest-ments founded? Why then did it buy shares from the very person who came to “own” it? And why, again, did it sell the shares back to his children? And why wasn’t the mega-transaction reported as required by rules?

Stock market regulators and authorities were treating these questions like a hot potato yesterday.

Making things sound even more intriguing is what Thaksin said about the obscure firm while defending himself in the share-concealment scandal in 2001. Apart from being accused of failing to report Shin shares held by his servants while declaring his assets to the National Counter Corruption Commission, he was also questioned on why he did not mention his shares held in Ample Rich Investments. “I sold them,” he said of the shares in Ample Rich Investments’ account.

Whoever “bought” that lot must be the world’s biggest fool, observers say, because that buyer sold the shares back to Thaksin’s children at Bt1 each. This, of course, won’t be the case if that buyer was a “nominee”.

Yet, if Ample Rich Investments has become a “nominee”, it will raise new questions. One of them concerns Thaksin himself and a public statement he made in May last year. The statement was recalled by Thai Post columnist Pliew Si-ngern yesterday:

“I watched CNN yesterday and know that the US Congress is amending the law because several companies don’t have headquarters in the United States but are registered in other countries like Panama or the British Virgin Islands. Those are considered unpatriotic firms because they may want to evade taxes.”

Source: The Nation - January 28, 2006

Jai Dee · January 28, 2006

SHIN CORP SHARE SALE: PM ‘condoned dodgy deal’

Thaksin should be held responsible for any legal improprieties: Abhisit. Emerging evidence suggests Prime Minister Thaksin Shinawatra condoned a questionable deal preceding his family’s Bt73.3-billion sale of Shin Corp shares, Democrat Party leader Abhisit Vejjajiva said yesterday. “Based on newly uncovered evidence, preparations for the Shin Corp transaction were not straightforward, and their manner has raised questions about tax liability and stock-market rules,” Abhisit said.

Even though the sale of the company was a private deal, Thaksin should be held accountable for any legal improprieties because of his dual position as both prime minister and the Shinawatra business empire’s nominal head, the Democrat leader stressed.

He added that the main opposition party would conclude its own investigation into the sale of Shin Corp within a month. The party’s probe will first zero in on suspicious circumstances surrounding the transaction just three days before the takeover of the company by Singapore’s Temasek Holdings, an investment branch of the Singapore government.

During the suspect transaction, Ample Rich, an offshore investment company located in the British Virgin Islands, sold its 10.97 per cent of Shin equity stakes back to two of Thaksin’s children, Panthongtae and Pinthongta, at Bt1 per share.

A few days later Panthongtae and Pinthongta sold their shares to Temasek at Bt49 per share.

“The Democrat Party will investigate the reason behind the transaction between Ample Rich and Thaksin’s two children,” the party leader noted.

He added that the Revenue Department and the Securities and Exchange Commission owed it to the Thai public to spell out the enforcement of tax laws and stock-market regulations pertaining to the Shinawatra family’s sale of their empire’s flagship business.

The transaction involving Ample Rich has raised several unanswered questions and may set a dangerous precedent for other investors trying to avoid paying taxes and circumventing stock market regulations through the manipulation of loopholes, Abhisit said.

“Many people are puzzled by the tax-collection standards of the Revenue Department, as average citizens are required to pay taxes while a huge tax liability is granted special exemption,” he said.

Democrat MP Korn Chatikavanij has been appointed by the party to lead the team investigating the sale of Shin shares.

“I will try to see if the prime minister has used his position to secure lenient treatment for his family as well as pledge future favours in order to induce Temasek into signing the deal,” Korn said. He added that Thaksin himself had conceded that it had not been easy to find a buyer willing to pay Bt70 billion for Shin Corp.

Korn said he was particularly interested in monitoring events as they had unfolded with regard to Temasek’s Singapore Telecommunication and Shin’s Advanced Information Service. He was referring to the licensing review for 3G mobile services.

Precedents have indicated that Thaksin might be willing to bend the law to benefit his family, he said.

A case in point was the law on foreign ownership, which was amended after Thaksin came to power to reduce the legal cap on foreign ownership in Thai companies to 25 per cent of equity stakes from 49 per cent, he said, which derailed a business plan of DTAC, a rival mobile-phone operator.

Yet three days before the Temasek deal, a revised law came into effect capping foreign ownership back at 49 per cent, he noted.

Korn said he would also look into possible stock-market violations stemming from a precursor deal with Ample Rich.

Regarding Temasek’s plans for Shin’s subsidiaries, including iTV and Shin Satellite, he said he would closely monitor the situation.

“I understand Temasek is not keen on the subsidiary companies. It is a matter of wait-and-see what Singapore will do with the Thai communication satellites and the television station,” he said.

Thai Rak Thai deputy spokesman Sutin Klungsang yesterday urged the public not to “jump to conclusions” about the Ample Rich allegations against Thaksin, which he described as “attempts to smear” the prime minister.

“I’m not convinced by the allegations. The prime minister has always acted straightforwardly,” said Sutin.

Thaksin yesterday evaded questions from Government House reporters about the Shin share sell-off and instead wished them for the lunar new year in Chinese.

Source: The Nation - January 28, 2006

ratcatcher · January 28, 2006

Buddhism: if shit happens, it isn't really shit.

Shit is happening right now regarding Ample Rich and the concealment saga. Thaksin is Buddhist and in his eyes it isn't really shit.

Jai Dee · January 28, 2006

SHIN SHARE SELL-OFF / DEMOCRATS URGE INSIDER TRADING PROBE

SET pushed to look into sale by Ample Rich

The Democrat party has threatened to seek legal action against the Stock Exchange of Thailand (SET) if it fails to investigate the sale of Shin Corp shares held by a company based in the tax-haven British Virgin Islands prior to the acquisition of Shin shares by Singapore's Temasek Holdings.

Democrat executive Korbsak Sapavasu said yesterday that the process of the Shin share sale by Ample Rich Investments Ltd to Prime Minister Thaksin Shinawatra's son Panthongthae and daughter Pinthongtha on Jan 20, and the subsequent share sale from his two children to Temasek on Jan 23 might constitute insider trading.

''Unless they had had inside information, how could the trade have happened?'' Mr Korbsak said.

He said the parties involved had never traded Shin shares previously and the sudden interest to trade obviously indicated some degree of knowledge of inside information.

Insider trading is a violation of the SET's regulations and offenders are liable to a fine equivalent to twice the gain generated from the sale in question, he said.

The opposition would ask the SET to investigate the transaction. Its failure to do so would constitute a dereliction of duty, and in that case the SET must be prosecuted because its failure would cause damage to the national interest, Mr Korbsak warned.

Opposition and Democrat leader Abhisit Vejjajiva questioned why Ample Rich Investments was so generous in selling Shin shares to Mr Panthongthae and Ms Pinthongtha at only one baht per share. This lot of shares was subsequently resold to Temasek at 49.25 baht per share three days later.

Mr Korbsak said his research showed that Mr Thaksin was the founder of Ample Rich Investments.

Mr Abhisit said his party would not let the issue slide. It expects to conclude its initial investigation in a month and establish the motive behind the share sale and pinpoint the parties involved in any irregularity.

Meanwhile, an Abac opinion poll conducted among 1,168 people in Bangkok found that 65.6% of respondents believed that the Shinawatra and Damapong families should pay capital gains taxes on their Shin share sale profits. Also, 66.5% believed the legal limit on foreign holding under the Telecommunication Operation Act had been eased to facilitate the Shin share sell-off.

Source: Bangkok Post - Saturday January 28, 2006

Jai Dee · January 28, 2006

Regulators silent while SC surges

Punters expect family to shift to property

Market regulators have declined to take any immediate action in the face of a 100% increase over the past two weeks in the share price of SC Asset Corporation Plc, controlled by the Shinawatra family. Analysts view the silence as strange, given the aggressive stance taken towards unusual trading volume in other stocks such as International Engineering (IEC) and Eastern Wire (EWC) in recent months.

The Stock Exchange of Thailand earlier this month suspended trade in IEC for a week to protect investors, and earlier it sharply curbed net settlement and margin trade in EWC. Both stocks are regarded as highly speculative.

However, SET officials maintain that they have been closely monitoring the shares of SC Asset, the property arm of the Shinawatra family. Officials said they could not tell, nor could they signal the market in terms of whether any action in the SC case was warranted.

''Investors have been speculating in SC shares because they believe that the Shinawatra family will turn its focus to invest extensively in its property arm after selling shares in Shin Corporation to Temasek Holdings,'' one analyst said yesterday.

The Shinawatra family this week sold its 49.5% stake in Shin to the Singapore government's investment arm for 73.3 billion baht.

The market is also speculating that SC would seek a strategic partner and was likely to participate in and win some bids for large government projects.

SC Asset shares closed yesterday at 22.40 baht, a 12-month high, after peaking at 24 baht earlier in the day. The shares gained 80 satang from Thursday in heavy trade worth 1.04 billion baht. Over the past 52 weeks the shares have traded in a range between 9.60 and 24 baht.

The share prices had moved between 9.90 and 10.40 baht between Jan 3 and 16 with modest daily turnover between one million and 30 million baht. Heavy trade started on Jan 18, with daily turnover between 496.83 million and 1.47 billion baht, the latter recorded on Wednesday.

According to Settrade.com, Kim Eng Securities has assigned a fair value for SC shares at 14 baht, DBS Securities quotes 30 baht and Tisco Securities 10.32 baht.

Kim Eng said it based its valuation on housing sales growth among low- to medium-income buyers and steady rents from Shinawatra Buildings I, II and III.

SC Asset, originally an office specialist renting space to Shin and its affiliates, has moved heavily into residential development and will open a number of new detached housing projects this year.

Attapol Sariddipuntawat, a vice-president of SC, reported to the SET yesterday that the company was still doing business as usual. He said reports in some newspapers that the company would expand into other businesses were groundless.

It was the first time that SC management had responded formally to market rumours since its share prices began surging.

The SET, meanwhile, has made no official comment.

Source: Bangkok Post - Saturday January 28, 2006

Butterfly · January 28, 2006

You know as this develops, Sondhi might very well have a case by his deadline of Feb 2 with enough Thai pissed off with the tax thing, to take it to the government house

And you would think that things couldn't get worse

Heng · January 28, 2006

How is this deal any shadier than anyone else here with holding corporations in tax havens? Just on this board alone, there are at least a dozen individuals that I know of with offshore shell companies. True, none are on the scale of the PM, but no one is paying taxes either.

Butterfly · January 28, 2006

True. But only the filthy rich should pay higher taxes, only because they don't, that the "rich" middle class and entrepreneurs have to overpay for them.

Edited January 28, 2006 by Butterfly

Erwin1011 · January 28, 2006

And also, more importantly, they are not PM of a country and have no direct influence on the legal background of the deal.

dr_Pat_Pong · January 28, 2006

The plot os moving from thickening to setting

Heng · January 28, 2006

Someone avoiding income taxes causes other folks to pay more taxes?

And as often is with the anti-whatever crowd, the issue is with the person, not the concept.

sriracha john · January 28, 2006

I think Heng is just bothered because he realizes now he should have paid more attention during "Dr." Thaksin's workshop:

Erwin1011 · January 28, 2006

I have no issue with the concept of tax avoidance as such. I have an issue where individuals start using/abusing their position to create a legal frame work clearly designed to favour their personal benefit in a very specific situation, which seems to be the case here.

Heng · January 28, 2006

The legal frame work being the holding corporation? There's nothing wrong with creating a corporation designed specifically for one transaction. Businessmen, actors/actresses, athletes, etc. often do the same.

Siripon · January 28, 2006

The legal framework being changing laws, ie reducing foreign ownership from 49 percent to 25 percent a few years ago when DTAC wanted to bring in foreign investors and then raising it to 49 percent literally 2 days before Temasek bought Shin. Changing the amount of royalties paid by ITV, the concession paid by AIS, aviation regulations for Air Asia.

~

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