Thaksin Sells Shin Corp Stake For Bt80 Billion

[penzman]

Perception, not the substance, is vital

The Shin Corp deal was meant to free the prime minister from allegations of conflict of interest, but has boomeranged into making his political standing more untenable

By THITINAN PONGSUDHIRAK

A clarification that was designed to clear up allegations of Prime Minister Thaksin Shinawatra's financial infractions involving the 73.3-billion-baht sale of his family-owned Shin Corp to the Singaporean government's Temasek Holdings has boomeranged. Speaking on behalf of the Shinawatra and related Damapong families, Dr Suvarn Valaisathien's explanation on Wednesday of the technicalities of the sale failed to defuse the exploding business scandal that has taken on a political life of its own. Perceptions of the prime minister's and his family's tax evasion and insider trading have become more important than the substance.

Even if the technicalities of the sale turn out to be above board, public suspicions of wrongdoing are likely to persist and deepen, adding to the adverse political fallout that now threatens to end Mr Thaksin's five-year reign in power.

To be sure, the aftermath of the Shin Corp deal is an ironic turn of events. The deal was supposed to set Mr Thaksin free from allegations of conflicts of interest, and to enable him to govern with his hands untied. It also made Mr Thaksin's vast assets liquid and mobile.

In the event his political standing becomes untenable, Mr Thaksin can look for safe havens to invest his capital. But instead of reducing Mr Thaksin's conflicts-of-interest liability, the Shin Corp sale has exacerbated it.

The financial labyrinth surrounding the deal, characterised by shifty share transfers centring on the obscure offshore Ample Rich Investments Company, with the possible benefit of insider information and tax evasion, has further galvanised Mr Thaksin's political opponents.

At stake now is Mr Thaksin's political survival in office. The Shin Corp sale may well turn out to be the tipping point in the ongoing struggle to overthrow the prime minister.

What has outraged the general public is the double standard involved. As the government has recently put forward a record budget outlay for fiscal 2006 of around 1.5 trillion baht, the growing pressure on revenue generation has consequently tightened tax codes and collection procedures.

More and more Thai individuals and companies are being forced to pay higher taxes. Yet, when it came to Mr Thaksin's family-owned historic intake of 73.3 billion baht, no less than Thanong Bidaya, the finance minister whose job ultimately is to maximise revenue, came out to guarantee and defend the huge amount as tax-free.

In fact, several key regulators have taken turns vouching for every aspect of the Shinawatras' Shin Corp income, from the heads of the Stock Exchange of Thailand and the Securities and Exchange Commission to the director-general of the Revenue Department. Perceived or real, the preferential treatment these authorities have accorded Mr Thaksin's family has contributed to the public outrage over the deal.

Mr Thaksin's gloating also has added insult to injury. In the immediate aftermath of the Shin Corp sale, he commented to reporters with typical smugness that the Shinawatras' income was not liable for tax and that this was an international practice.

He may have been right, if all the technicalities eventually prove to be correct, with proper documentation.

Yet his patronising, catch-me-if-you-can treatment of the public adds to the uproar. To the public, it was a blatant disregard for, and a mockery of, transparency and accountability. At the minimum, it appeared to violate business ethics and moral standards in society.

Mr Thaksin is not just a run-of-the-mill businessman cashing in on a routine business transaction, but a prime minister with overwhelming authority to maximise and justify his business returns in the country's largest corporate sell-off.

Having suppressed public dissent for so long, Mr Thaksin is finding out the virtue of hearing opposing viewpoints the hard way. The Bangkok-based movement to topple his government is poised to attract all kinds of critics and bystanders now that the Thaksin government's days appear numbered.

A growing number of people who previously supported the prime minister have turned against him. Passive watchers of Mr Thaksin's rule have become sceptics, and critics have turned to outright, active opposition. As the anti-Thaksin train speeds ahead on all locomotives, more and more people will not want to miss out. It is a sign of the times that people who used to view Mr Thaksin favourably are now competing with each other to be at the front of the anti-Thaksin train. The original Thaksin critics, who as a minority had taken him to task for conflicts of interest and abuse of power over the past five years in the face of unpatriotic accusations, can only feel vindicated. (You're right about that and thank you, Khun Thitinan)

A major disturbing outcome of Mr Thaksin's growing political vulnerabilities is Thailand's Bangkok-rural disparity.

Sincere or otherwise, Mr Thaksin demonstrated recently at his reality show in Roi Et province that he remains popular throughout much of the provinces.

One critical legacy of his rule will be the exposure of Bangkokians' neglect of their countryside's countrymen. That he is adored by the rural electorate as much as he is loathed by Bangkok's voters is an issue that the Thai people need to ponder and address effectively well after Mr Thaksin's political demise.

Very true... the disparity should be examined closely.

- Bangkok Post

For every friend or family member he has appointed himself, he has made countless enemies in many areas of the government, including top spots in the army where people were suddenly shoved aside in order to favour one of his cronies, taking them to the top. Many have been silent for a while but for how long? You you can only hold down the boiling rice pot's lid down for so long before it blows up in your face...

[Golf]

The Army will not interfere this event. Any vilolence that will take place this Sat will come from the paid thugs and the Thai Royal police forces.

Thai Royal forces? They are just thugs with badges!

Golf

[Jai Dee]

SEC insisted that the deal involving Ample Rich Investments is not considered insider trading.

Secretary-general of the Security and Exchange Commission (SEC) Teerachai Puvanartnaranuban (ธีระชัย ภูวนาถนรานุบาล) insisted that the deal involving Ample Rich Investments is not considered insider trading, but said that the SEC needs more time to investigate other matters.

Mr. Teerachai said that there is information on the share transfer to Mr. Pantongtae Shinnawat (พานทองแท้ ชินวัตร), but the SEC does not have documents on the change of previous share owners. He said that the SEC needs more time to investigate the matter. However, he said that the Prime Minister’s sale of shares to his two children at one baht per share, which is much below than the market price of 49 baht per share, is not considered insider trading, according to Article 241. He explained that the share sale was internal within the family, and thus, is not considered taking advantage of outsiders. As for the change of the siblings’ shareholding of Shin Corp shares after holding Ample Rich shares, he said that Mr. Panthongtae is considered as having failed to report his shareholding.

Maenwhile, President of the Stock Exchange of Thailand Kittirat Na Ranong (กิตติรัตน์ ณ ระนอง) said that the SET has not found any irregularities in the share sale of Shin Corp to Temasek, adding that the SET was not contacted by the company prior to the takeover deal, as the transaction was carried out in big lots, which do not require declaring to the SET.

Source: Thai National News Bureau Public Relations Department - 03 Febuary 2006

[Jai Dee]

OVERDRIVE: Thaksin’s dilemma: Cash out or stay put

Prime Minister Thaksin Shinawatra was dealing with a Catch 22 situation when it came to selling off Shin Corp. He was damned if he sold it and damned if he did not. The timing was very critical. If Thaksin had waited until after February 4, the Bt73.2-billion takeover deal might never have happened.

For Sondhi Limthongkul, the media maverick, had set February 4 as a D-Day to unseat the prime minister. He plans to lead a rally to appeal to His Majesty the King and call for Thaksin’s resignation in a peaceful way. This would mark the first step for a new round of political reforms.

Nobody can really predict whether the rally will spill over like the May tragedy in 1992, or whether it will fizzle out like the previous demonstration at Government House. Still, if the political situation were to worsen, Temasek Holdings of Singapore, or other foreign buyers, would not risk buying Shin Corp and Thaksin’s window of opportunity to sell Shin Corp would be closed forever. Selling Shin Corp for almost US$2 billion was, as Thaksin said, not as easy as selling khanom kheng. To play it safe, Thaksin decided to seal the deal with Temasek before February 4. It’s normal that if you’re not certain about the future, you prefer to have cash in hand rather than stocks or other assets. But the sale has backfired. Instead of helping to send out a signal that Thaksin had done away with a conflict of interest between his business and political dealings once and for all, the deal has added gasoline to the fire. The impression now is that Thaksin and his family have reaped the full benefits from this conflict of interest; that they have sold out the country’s mobile, satellite and television concessions to Singapore, and that they have avoided having to pay any taxes for this deal of the century.

Sondhi’s rally has benefited enormously from the sale of Shin Corp. It plays into the sentiments of even those who used to support Thaksin. Sondhi is expected to gain broader popular support as critics and academics have come out to denounce the Shin deal.

Before the Shin deal, Thaksin’s credibility as a leader had been questioned. But he had managed to ride through it every time. But now the country’s core intellectual leaders are beginning to question his legitimacy to rule in the future.

Is it the beginning of the end? If you take a second look at the deal you might be under the impression that Thaksin has spent the last six months meticulously taking every step to ensure that he was able to sell his business for the top price. The deal was perfectly executed on January 23. And when you look back to the time when Thaksin sold out national assets, such as the privatisation of PTT Plc, the Laem Chabang deep-sea port, or Egat Plc, you can see he completed these deals in a lousy and fishy way without any of the meticulous planning that went into the Shin deal.

More than six months ago, share registration documents showed Ample Rich Investments Ltd, formed by Thaksin in March 1999 and incorporated in the tax-haven British Virgin Islands, as the owner of 10.8 per cent of Shin Corp shares. As Shin Corp would be sold, Ample Rich permitted UBS Bank to become custodian of its Shin Corp shares, which would facilitate the future transaction.

Why did Thaksin set up Ample Rich in the first place? The answer is simple: Ample Rich would help look after the stock movements of Shin Corp. Lawyer Dr Suvarn Valaisathien’s clarification that Ample Rich was established to help facilitate Shin Corp’s listing in the Nasdaq market in New York was not weighty enough. Shin Corp could have directly applied for a listing in Nasdaq. Ample Rich, in itself, did not have any value because it was set up with capital of only US$1.

According to Suvarn, Thaksin sold 100 per cent of Ample Rich to his son Panthongtae Shinawatra on December 1, 2000 as he was preparing to contest the general election in January 2001. However, Thaksin did not report this transaction to the National Counter Corruption Commission. He did not report any income from selling the 32.9 million shares in Shin Corp to his son. Since then nobody has been paying any attention to Ample Rich. But if you check out Ample Rich’s Shin Corp stock holdings, you would find out that Ample Rich has not been idle but has also traded the Shin Corp stocks. Interestingly, daughter Pinthongta Shinawatra got involved in the Ample Rich affair about six months before the sale of Shin Corp. According to Suvarn, Pinthongta on May 15 of last year bought 20 per cent of Ample Rich. This had reduced Panthongtae’s stake in the company to 80 per cent. Ample Rich has yet to provide any document to back up this claim.

On January 20 – three days before the Shin deal was sealed, Ample Rich sold 164.6 million shares (slightly more than 5 per cent of Shin’s share capital) each to Panthongtae and Pinthongta. The following Monday, Pinthongta sold 604,600,000 or 20.15 per cent to Temasek, compared with Panthongtae’s sale of 458,550,220 or 15.29 per cent. Why did Panthongtae and Pinthongta have to buy the Shin stocks from Ample Rich, in which they already held 100 per cent? The answer is that Temasek would not buy stocks from nominees, a measure to prevent money laundering. So Ample Rich would have to spit up the Shin stocks to Panthongtae and Pinthongta so that the two could sell them to Temasek out in the open.

You have to admit the whole deal was a work of genius because every step of the way – from the several rounds of share transfers to the eventual sell-off to Temasek – the Shinawatra and Damapong families have avoided paying any tax. The other side of the coin of the Shin deal that Thaksin has overlooked is that the public would question the ethics and eventually the legitimacy of his leadership. Now you can say that the damage done to his leadership is irreparable.

Source: The Nation -February 03, 2006

[dan10400]

Thai Day usually has some interesting stories and commentaries.

http://www.manager.co.th/IHT/ViewBrowse.as...owseNewsID=7300

The following was probably one of the best commentaries on this subject

i have seen:

------------

COMMENTARY: Is it worth it?

By Panthep Puapongpan 3 February 2006 14:29

“I made an honest mistake,” Thaksin Shinawatra said four years ago in the Constitutional Court, his voice trembling. He was addressing the judges whose verdict on whether he was guilty of concealing his assets by transferring their ownership to his drivers, gardeners and maids would profoundly affect his political destiny.

“They must be jealous,” the prime minister recently told reporters, referring to those who had wondered aloud whether members of his family should pay tax on the sale of their Shin Corp shares.

Thaksin has changed. Almost everybody is asking whether he is still genuinely grateful to the 19 million voters who handed him the prime ministership. It is obvious that he is unrepentant. He also seems bent on self-destruction.

The mystery surrounding Ample Rich Investments Limited, the company he set up in the British Virgin Islands, and its role in the controversial sale of 49.5 percent of the country’s biggest telecommunication and transportation conglomerate, forced the prime minister, who thrives on being the center of attention, to keep a low profile in the past week.

On Wednesday, he assigned Dr Suvarn Valaisathien, the Shinawatra and Damapong families’ legal adviser, tax consultant and spokesperson, to hold a press conference to respond the criticisms, questions and suspicions generated by Ample Rich and the share sale.

Unfortunately for the two families, Dr Suvarn’s half-answers, obvious evasion of prickly issues, continually parched lips and evident perspiration have not only failed to satisfy the public’s quest for the truth, but have also led to an escalation of calls for Thaksin’s resignation.

Late Wednesday and all yesterday, groups of university professors and lecturers, senators, political commentators and social activists published open letters detailing his failures and clamoring for him to step down. Signature campaigns are in full swing.

The joint press conference held yesterday by the Revenue Department, the Stock Exchange of Thailand and the Securities and Exchange Commission at the bidding of Finance Minister Thanong Bidaya has only added fuel to the fire as it is clear that the government agencies were merely attempting to justify their earlier questionable tax rulings and expeditious defenses of the share sale.

The Revenue Department, a government agency under the Finance Ministry, and thus part of the executive branch, continues to insist that the various transfers and sales of shares in the gigantic transaction are tax-exempt.

If there is a change of government, and Thaksin ceases to be prime minister, will the Revenue Department stick to its rulings favoring the two families, or will it admit its errors and send them a bill for payment of back taxes? Remember, nothing lasts forever, except the truth.

Dr Suvarn should be asked: If a fellow tax expert uses his knowledge to help millionaires in Thailand to avoid tax by exploiting loopholes, and destroys morality as result, would he consider that person to be an honorable and clever man, or a knave who should be condemned by the public for destroying a core component of the country’s culture?

It is quite incredible that the members of the Shinawatra and Damapong families who have realised a profit of 73.3 billion baht by selling the country’s satellite parking rights, important telecommunications wavebands, government concessions and the privilege of displaying the royal Garuda emblem, are still trying to explain why it is correct not to pay tax.

Their efforts at justification only serve to confirm that their greed knows no boundaries.

They need not continue to waste their time defending the immorality of their share sale and focusing only on the law, for the law is made up of words written by human beings, and we know that human frailties inevitably produce loopholes which can be exploited.

Scruples and morality, on the other hand, give rise to everlasting standards.

Scrupulous and moral government leaders and politicians do not make use of legal loopholes to benefit themselves and their associates, but strive to close them in the national interest.

All citizens are required to comply with man-made laws, but the prime minister has a higher obligation. He must also comply with moral standards. And he must serve as a role model.

So, in the case of the sale of Shin Corp shares, the issue goes beyond legality. Ethics takes precedence.

Some people ask why the prime minister and his family are being taken to task over the sale of Shin Corp shares, when the sale of United Communication Plc (UCOM) shares by the Benjarongkul family was unquestioned.

The two cases are similar only to the extent that they involved the sale of shares. There are important differences in all other aspects.

The most obvious, and crucial, difference is that the head of the Benjarongkul family is not a leading politician, much less the prime minister. Secondly, Thaksin is obliged to declare all his assets to the Nation Counter Corruption Commission, but the head of the Benjarongkul family is not.

Thaksin oversees CAT Telecom and TOT Plc, both of whom are concession partners and competitors of Advanced Info Service, but no one in the Benjarongkul family oversees a state enterprise that is related in some way to Total Access Communication.

Thaksin has the power to influence, even initiate, the tax rates on his family’s businesses, but the Benjarongkul family head does not. Thaksin, as the head of government, is eventually responsible for the collection of taxes to fund the country’s administration and development.

He is supposed to encourage taxpayers to contribute to the country’s coffers. Therefore, he has to ensure that taxes are paid. What has happened, instead, is that he has allegedly plotted with his family members, and his team of advisers and government agencies, to avoid paying tax.

The average age of a Thai is about 30,000 days. Most of us devote the first 10,000 days to learning, the second 10,000 days to working and earning a living, and the last 10,000 days to finding peace and happiness.

It goes without saying that, in all stages of our lives, we have to be good citizens and try to do what we can for our country in every way possible.

The prime minister has already spent 20,000 days of his life. He is left with about 10,000 days to find peace and happiness. After what he has done since the beginning of this year, can he really be happy and at peace for the rest of his life?

Can he and the members of the Shinawatra and Damapong families spend all the money from the share sale? The interest alone on 73.3 billion baht is at least seven million baht a day.

In the remaining 10,000 days of his life, will he be tortured by the thought that he cannot spend his fortune, and that he cannot take even one baht with him when he dies?

His legacy to his families is karma and shame, not material or spiritual wealth. More likely than not, he and they will be condemned by the public for all time.

The prime minister’s monetary fortune was surely more than offset by his children’s feelings of shame and humiliation at the recent annual Chulalongkorn-Thammasat football game, where they had to endure the public denunciation of the Thaksin government as the most corrupt government in Thai history.

Their parents were mocked continuously and were the laughing stock of the event. How does it feel to be the cause of your children’s suffering in this life and future lives? Is the money really worth it all?

Most people will probably remember the poor woman who stole food and milk in a department store to feed her starving children. The picture of her children crying in front of her jail was tear-jerking indeed. She admitted to the crime, but she said that poverty and her children’s empty stomachs forced her to steal. She gained the public’s sympathy and support. When her children grow up, it is certain that they will feel only gratitude to their mother.

On the other hand, the public and history will never forgive billionaires who abuse their political power, sell off their country and try to avoid paying tax. Their conduct might not be illegal, but Buddhists also believe in morality and the afterlife. Karma will catch up with them and their children will bear the retribution for their sins.

[Jai Dee]

Bid to oust Thaksin gains momentum

Professors from throughout the country yesterday added their names to a growing list of academics and social activists calling for Prime Minister Thaksin Shinawatra to step down.

More than 200 academics from nine universities added their signatures to an open letter initially written by 19 well-known economics lecturers from Thammasat University and made public Wednesday evening.

“The people had hoped that you and your associates would use the legitimacy [from the Thai Rak Thai party’s January 2005 landslide electoral victory] and political stability to resolve the country’s problems, foster national unity and work for the public’s interest,” read an excerpt of the letter. “But instead, you exploited that legitimacy to destroy all important principles of the Constitution.”

The scholars condemned Thaksin’s leadership and criticized his exploitation of legal loopholes, which allowed his family to earn more than 73 billion baht tax-free from the sale of Shin Corporation shares.

At Parliament House yesterday, a group of academics and social activists led by Suthep Atthakorn, former minister of university affairs, and Prasarn Marukapitak, who as a student led the October 1973 anti-government protests, released the letter to the press and called on other scholars to sign.

“We are taking up the Thammasat lecturers’ initiative by distributing this letter for more academics to sign,” Prasarn told ThaiDay.

“The names on the letter are growing rapidly and it means that the power to oust Thaksin is becoming stronger.”

Separately yesterday, professors from Chulalongkorn University released their own anti-Thaksin letter.

“The country’s leadership is obviously in a severe crisis,” the Chulalongkorn letter read.

“Thaksin clearly lacks any legitimacy to rule in a democratic society,” said Amara Pongsapich, dean of the university’s political science faculty.

“He has obstructed public freedom, created a mockery of the legislative process, overshadowed the workings of independent bodies, allowed corruption and cronyism to flourish and clearly lacks a sense of good governance,” he said.

“The positioning of countless academics this time signifies clearly that Thaksin has lost all credibility to govern,” said Trakul Meechai, a political lecturer at Chulalongkorn.

“More names are being added to the letter.”

Surichai Wankaew, a senior political science lecturer at Chulalongkorn and a member of the National Reconciliation Commission, told ThaiDay that though the public’s anger is centered on the Shin deal, there are much deeper problems with the country’s political structure.

“By exploiting a legal loophole to avoid taxes, he has placed the benefits of those close to himself before those of the country…[This] reflects the continuous problem of his leadership, accountability and ethics of his decisions.”

Surichai, however, did not join his colleagues by signing either letter. The problems with the system, he said, will not end with Thaksin’s removal.

“I think now the country is entering a political crisis that requires all sides to help each other think of a sustainable solution.”

Meanwhile, Kaewsan Atiphoti, a Bangkok senator and drafter of the Constitution, will today deliver a letter to House Speaker Pokin Polakul, which calls for Thaksin’s impeachment and is intended for the Constitutional Court.

Kaewsan claims Thaksin potentially violated the Constitution by improperly declaring his assets.

Source: ThaiDay - 3 February 2006 14:30

[sbk]

A major disturbing outcome of Mr Thaksin's growing political vulnerabilities is Thailand's Bangkok-rural disparity.

Sincere or otherwise, Mr Thaksin demonstrated recently at his reality show in Roi Et province that he remains popular throughout much of the provinces.

One critical legacy of his rule will be the exposure of Bangkokians' neglect of their countryside's countrymen. That he is adored by the rural electorate as much as he is loathed by Bangkok's voters is an issue that the Thai people need to ponder and address effectively well after Mr Thaksin's political demise.

This is not true of the entire country, only the NE and Northern parts. He is reviled in the South, upper, middle and lower sections.

[dr_Pat_Pong]

A major disturbing outcome of Mr Thaksin's growing political vulnerabilities is Thailand's Bangkok-rural disparity.

Sincere or otherwise, Mr Thaksin demonstrated recently at his reality show in Roi Et province that he remains popular throughout much of the provinces.

One critical legacy of his rule will be the exposure of Bangkokians' neglect of their countryside's countrymen. That he is adored by the rural electorate as much as he is loathed by Bangkok's voters is an issue that the Thai people need to ponder and address effectively well after Mr Thaksin's political demise.

This is not true of the entire country, only the NE and Northern parts. He is reviled in the South, upper, middle and lower sections.

Thaksin RIP

[sriracha john]

A major disturbing outcome of Mr Thaksin's growing political vulnerabilities is Thailand's Bangkok-rural disparity.

Sincere or otherwise, Mr Thaksin demonstrated recently at his reality show in Roi Et province that he remains popular throughout much of the provinces.

One critical legacy of his rule will be the exposure of Bangkokians' neglect of their countryside's countrymen. That he is adored by the rural electorate as much as he is loathed by Bangkok's voters is an issue that the Thai people need to ponder and address effectively well after Mr Thaksin's political demise.

This is not true of the entire country, only the NE and Northern parts. He is reviled in the South, upper, middle and lower sections.

Thaksin RIP

Expecting similar headlines from The Nation/Bangkok Post soon?:

Image taken from People Power: An Eyewitness History, The Philippine Revolution of 1986

[Jai Dee]

Civic groups ask NCCC to investigate Thaksin

Civic groups Monday asked the National Counter Corruption Commission (NCCC) to investigate whether Prime Minister Thaksin Shinawatra had properly declared his assets.

The Civil Liberty Protection Group led by Veera Somkwamkid and the Democracy Federation led by Veng Tojitrakarn submitted a joint letter to Yongyuth Malithong, director of NCCC Office' Public Complaints Division, urging for a probe against Thaksin.

Veera said the sale of Shin Corp by Thaksin's family had disclosed information that Thaksin might allegedly own nominal Ample Rich Investments Co but failed to state it in his assets declared to the NCCC.

Veera said he hoped the NCCC would launch an investigation after nine new NCCC commissioners are appointed.

Source: The Nation - Feb 06 , 2006

[tettyan]

Aside from the whole "Ample Rich" fiasco, I thought that the Shin Corp sale complied to the letter of the law, even if the ethics of it are at best debatable. But now, the Law Society of Thailand has given us a little more to think about. It's beginning to seem more and more plausible now that the treasury has really bent over backwards in bending the laws to ensure that the Shin Corp sale was tax-free.

ANALYSIS: Temasek-Shin Corp deal offers a free lesson in tax-planning

Published on February 07, 2006

The Temasek Holdings-Shin Corp deal might have cost Prime Minister Thaksin Shinawatra political clout, but it carries several virtues, especially to businessmen who have been given a free lesson on tax planning. Despite several dubious tax issues, the authorities have brushed aside public demand that the five persons benefiting from the sale of shares in Shin Corp Plc be taxed.

Even before the explanation by the Shinawatra family’s legal counsellor Suvarn Valaisathien last Wednesday, Finance Minister Thanong Bidaya said that the deal was wrapped up within a proper legal framework.

A day later, the Revenue Department at a press conference reiterated its stance: none of the sellers should be taxed on the Bt73.3 billion proceeds they reaped from selling a 49.6-per-cent stake in Shin to Temasek.

Renowned for his legal counselling and rated as one of the country’s tax planners, Suvarn also insisted that the deal had been executed in accordance with Thai law.

Paul Ashburn and Andrew Jackomos, senior partners of BDO Richfield Advisory Ltd, an international tax consulting firm, said in a letter to The Nation: “There is no new precedent set here. Every day people sell shares on the stock market tax free, in accordance with the law. Every day taxpayers exercise their legal right to arrange their affairs so they can legally minimise their tax bill. The public should be thankful for the free lesson on tax planning.”

Now tax planners can advise their clients to copy the entire process of these transactions, which date back to 2000.

Then, Thaksin’s wife, Khunying Pojaman, transferred Shin shares to her brother Bhanapot Damapong at par without paying tax. Thaksin’s transfers of shares to his children, Panthongtae and Pinthongta, were not taxed either, nor the transfer of shares to his sister, Yingluck.

No taxmen were present when there were transactions of shares between the British Virgin Islands-registered Ample Rich Investments Co Ltd and their former and present shareholders.

To tax planners, these two episodes were determined on the right grounds. While not yet making any profit from the shares, the beneficiaries should not pay taxes for non-existent benefits.

Still, several lawyers raised eyebrows when learning that they were still untaxed after realising capital gains from the shares.

In the first case, Bhanapot and Yingluck reaped Bt39.25 per share in profits, when selling those they received at Bt10 par value at Bt49.25 apiece on January 23. Panthongtae and Pinthongta netted an even higher amount – Bt48.25 per share – on the 329.2 million shares they bought from Ample Rich on January 20 at only Bt1 a share.

Taxmen said selling shares in the stock market sheltered them from capital gains tax.

Dej-udom Krairit, president of the Law Society of Thailand, was outraged with the conclusion. He noted that it is against the Revenue Code.

The Law Society launched a statement explaining that a company’s shares enjoy two statuses: common shares and listed securities. “The law says if you accumulate common shares, you have to sell them as common shares [out of the market]. If you have listed securities, you have to sell them as listed securities [in the market],” Dej-udom said.

He noted that the deal broke the law when Thaksin and Pojaman transferred their shares to their relatives as common shares, but the shares were sold as listed securities.

A dubious point lies with the multi-level share transactions of Ample Rich between Thaksin, his son and his daughter, which does not involve any taxation.

Whatever the accusations might be, they have now been clarified by the financial authorities. And tax planners can now give similar advice to billionaires who need no longer worry about the enormous taxes that share transactions to their children should incur.

There are none.

Business Desk

The Nation

[sriracha john]

AIS gets the backlash from Shin Corp sale

ThaiDay

AIS, which enjoys the largest subscriber base in Thailand, has come under fire for dealings of parent firm Shin Corp.

Just a few weeks after the historical buyout of Prime Minister Thaksin Shinawatra’s family’s assets in the telecommunications conglomerate Shin Corp, Advanced Info Services, the country’s leading mobile telecommunications operator and the jewel in the Shin Corp crown, is facing a barrage of threats by consumer groups who say they will ask regulators to pull its operating licenses.

Government agencies have also independently begun looking into whether Shin Corp’s new ownership structure runs afoul of existing regulations.

“We are going to petition the [National Telecommunications Commission] next week to withdraw the licenses granted to AIS,” because the ownership structure violates applicable laws, said Sairung Thongplon, who heads a group called Foundation for Consumers. Her organization claims that, after the Temasek investment, AIS is no longer a Thai-owned company and, because of this, does not have the right to operate mobile telecommunications in the kingdom.

Thai AirAsia, the budget airline partly owned by Shin Corp, is currently scrambling to find Thai buyers to take over Shin’s holdings, as its license to operate here is in jeopardy given the new foreign investors, according to Thai AirAsia president Tassapon Bijleveld. Although executives at the airline have already said Shin will need to transfer ownership of its shares to other buyers for the airline to operate legally, AIS and Sattel executives have not acknowledged that the Temasek deal violated any laws.

The deal, in which Singapore-government-controlled investment fund Temasek led a group of investors in the purchase of the Shinawatra family’s 49.6-percent stake in Shin Corp for US$1.87 billion in January, has come under increasing scrutiny by lawmakers and the general public.

A spokesman for Temasek said that, despite the involvement of the Singaporean firm, the investors are still Thai. Temasek does not directly own any shares of Shin Corp, but rather stakes in a group of holding companies set up for the January transaction.

Critics of the deal, however, say Temasek directly or indirectly owns more than 49 percent of Shin Corp now, in violation of the law. In addition, regulators have to look into possible violations of industry-specific regulations, according to critics.

AIS, which has the largest number of cellphone customers in the country, has been specifically targeted, with some activists threatening to boycott the operator because of the deal with Temasek as well as yesterday’s petition to the NTC.

But even if the boycott does not have an impact, pressure from regulatory agencies may cause problems for the subsidiary companies. The National Telecommunications Commission is in the process of investigating the ownership structure of AIS, according to Suranand Wongwittayakamchorn, the secretary-general of the commission. In addition, the Information and Communication Technology Ministry is investigating whether Temasek’s holdings in Shin Corp violate any terms of the concession agreements for Shin Satellite, he said.

[Jai Dee]

Shin deal exposes legal loopholes

Prime Minister Thaksin Shinawatra’s economic team often touts plans to “modernize” Thailand into a country on par with the world’s most developed countries.

“We realize that the world is moving forward at a phenomenal pace and those who remain idle will soon be left behind,” Thaksin told foreign investors interested in bidding for the country’s 1.8-trillion-baht megaprojects last month. “For this reason, we have undertaken wide-ranging social and economic restructuring, geared toward adapting Thailand to the global paradigm shift and maintaining our competitive edge in the globalized world.”

Through free-trade deals, massive investment projects, and continual efforts to make Bangkok the “hub” of everything in Southeast Asia, the government gives the impression that it’s embracing the free world with open arms. But some analysts worry that as Thaksin opens the front door to globalization, he has neglected to do some long-needed housecleaning.

On the one hand, the 73.3-billion-baht Shin Corp share transfer between Thaksin’s family and Singaporean-run Temasek Holdings could pave the way toward tearing down the protectionist walls that surround the telecommunications sector. But on the other hand, it has exposed the shortcomings of the country’s legal and constitutional framework, and the institutions charged with enforcing them.

“The Shin Corp deal shows us that individual institutions cannot perform effectively due to interference from the political sector,” said Sompob Manarangsun, a political economist at Chulalongkorn University. “Without legal, institutional and organizational reform, we cannot restore and develop good governance in this country. And without good governance, it will be very difficult for Thailand to see sustainable growth in the future.”

On a legal level, the Shin Corp deal has uncovered loopholes that allowed Temasek Holdings to bypass laws restricting foreign ownership of telecommunications assets and let the Shinawatras avoid paying tax.

Temasek bought its stake in Shin on January 23, the first day an amendment to the Telecom Business Act came into effect that increased the limit on foreign ownership of Thai telecommunications companies to 49 percent. But through the creation of companies like Cedar Holdings, ostensibly majority-owned by Thais even though Singaporeans hold nearly 10 times the voting power, Temasek’s actual stake in Shin amounts to about 88 percent.

“The deal between Shin and Temasek resulted in permanent damage to the regulatory regime,” said Somkiat Tangkitvanich, a research director at the Thailand Development Research Institute. “Even though the Thai telecom law caps foreign ownership at 49 percent, you can structure a deal to sidestep Thai law. The deal sets a bad example and gives foreigners a blueprint for bypassing Thai law.”

Notwithstanding the allegations of insider trading, money laundering and share manipulation – among others – that arise from the existence of various off-shore firms and funds such as Ample Rich that traded Shin shares, the deal also took advantage of conflicting tax laws.

In 2000, when Thaksin sold his Shin Corp shares to his sister Yingluck, and his wife Khunying Pojaman Shinawatra sold her shares to her elder brother Bhanapot Damapong, the Revenue Department declared the transactions tax-exempt since the buyers had not yet derived any income from the purchase of the shares. But then when Yingluck and Bhanapot realized the profit from the initially tax-exempt sale, the two did not have to pay tax again because the trading of shares by individuals on the Stock Exchange of Thailand (SET) is exempt from capital gains tax.

“The Revenue Department has not been consistent with itself on previous rulings,” said Korn Chatikavanij, a Democrat lawmaker and former investment banker. “It’s not a closed case in terms of taxation. But the apparent lack of urgency by state agencies to protect the national interest has caused frustration and disappointment.”

The Revenue Department has not been the only one to come under fire. Critics also blame the Securities and Exchange Commission (SEC) for not aggressively investigating the Ample Rich affair, and accuse SET of negligence for failing to halt trading on Shin shares even though rumors (that turned out to be completely accurate) about the deal swirled for about two months before the transaction took place.

The young National Telecommunications Commission (NTC), which is set to issue 3G licenses in the near future, was not required to review the deal. And the National Broadcasting Commission (NBC) is still not operational, which leaves the now-Singaporean-owned iTV and other broadcasters in a legal free-for-all (and leaves community radio operators under threat of arrest).

A lack of strong regulators allows government officials to make decisions for short-term political gain rather than long-term growth and stability. For instance, before appointing an interim energy regulator on the eve of state-owned electricity firm EGAT’s failed initial public offering in November, the government’s energy policy was characterized by unsustainable petrol subsidies and one-off measures designed to keep electricity prices from rising to market levels.

While the Shin deal has brought into question the effectiveness of regulatory bodies, it has also reminded voters of the impotence of the constitutionally enshrined independent bodies. Critics say the Senate, the Constitutional Court and the Anti-Money Laundering Office are all heavily influenced by the ruling party.

The National Counter Corruption Commission, which first charged Thaksin with concealing his Shin Corp assets in the late 1990s, is currently commissionerless. And the State Audit Commission finally reinstated Khunying Jaruvan Maintaka as auditor-general after the politically troubled prime minister requested the move in a letter a few weeks ago.

The fragile regulatory regime could be due for another overhaul if the government concludes trade talks with the US by the end of April. A rushed process could further expose cracks in the system and lead to many similar problems in the future, according to Razeen Sally, an economist at the London School of Economics.

“The danger here is that Thailand might sign up to strong regulatory disciplines, but only in capitulation to US demands and without domestic will or capacity,” Sally wrote in a recent study on Thai FTAs. “In that event, implementation of commitments will be messy, partial and ultimately unsuccessful, made worse by a likely domestic backlash against perceived [read American] impositions.”

Even so, analysts said the government has to start somewhere. Strong regulatory bodies around the world still don’t prevent large-scale corporate scandals like Enron, and Thailand’s young institutions will only grow stronger as they gain experience.

“Having the US FTA or World Trade Organization requirements put pressure on the government to strengthen regulations is nothing but a good thing,” said Mark Hutchinson, head of research at Mullis Capital. “Will there be shenanigans in the future? Absolutely. But Thailand’s institutions are getting stronger all the time. It’s a process of evolution.”

Source: ThaiDay - 14 February 2006

[Heng]

50,000-100,000, those are nice numbers, but no one ever said he had 100% of the votes. If there's so much opposition, what are the other 6-7 million Bangkokians (supposedly those unsatisfied with him are just average working city folks) doing during these rallies: including the 1 million+ who live within 10-15 minutes of the Royal Plaza. Too busy/depressed/oppressed/hot for a revolution?

[sriracha john]

UPDATE

Temasek now holds 96% stake in Shin Corp

- BP

15/03/06

Temasek Holdings, the investment arm of the Singapore government, has raised its total stake in telecom giant Shin Corp to more than 96% following a mandatory tender offer that closed last week.

SCB Securities, the financial adviser to Temasek, reported the results of the tender, held from Feb 2 to March 9 and priced at 49.25 baht per share, to the Securities and Exchange Commission yesterday.

Cedar Holdings, a Thai nominee for Temasek, raised its Shin holdings to 51.98% from 33.36% after the tender. Aspen Holdings, also a Temasek nominee, raised its shareholdings to 44.14% from 15.85%.

The two Temasek nominees purchased a total of 1.418 billion common shares through the tender, and now hold 2.9 billion shares combined.

The two companies purchased a 46.9% stake in Shin from the Shinawatra and Damapong families in late January for 73.3 billion baht.

The transaction has attracted strong criticism from anti-government groups who argue that the deal evaded tax and securities laws and had given control of national communication assets to a foreign government.

Cedar also announced that it had purchased 159.12 million SHIN-W1 warrants, convertible on a 1:1 basis and equal to a 5.26% stake in Shin.

The successful tender was widely expected in the market, and raised questions about whether Shin can remain a listed company as its free float of shares now has fallen below the 15% minimum set by the Stock Exchange of Thailand.

In the tender offer, Temasek said that it had no policy to delist Shin Corp from the SET within 12 months of the offer date, save if the firm was unable to maintain its qualification as a listed company.

Temasek also announced that it would not purchase additional shares in Shin Satellite or iTV, two other listed units of Shin Corp, over the next 12 months.

Kittiratt Na Ranong, the SET president, said the exchange would give Shin time to raise its free float if it wanted to remain a listed company.

''I think [Temasek] and small investors want to see Shin remain a listed company. The SET will give them time to change their share free float to meet the listing requirement,'' Mr Kittiratt said.

''We've made some exceptions in the past for companies with low free floats, such as a number of financial institutions following the 1997 economic crisis.''

Mr Kittiratt said the SET would give 20 other listed companies similar time to also extend their free float to 15% to 20% in order to maintain their listing status.

Shares of Shin on the SET fell 1.75 baht yesterday to close at 45.25 in trade worth 9.12 million baht. Shares of mobile operator Advanced Info Service, the mobile-phone flagship of the Shin Group, closed at 95.50 baht, up two baht, on trade worth 356.7 million baht.

Temasek, through Cedar and Aspen, has also launched a voluntary tender offer for AIS at 72.31 baht per share. As of March 3, no shares were taken under the tender offer, given the sharp discount of the offer price to the market price.

[thedude]

question. if SCB is the financial advisor to temasek in the deal from the very beginning, and the major shareholder of SCB is the Crown Properties Bureau, does it not imply then that the allegations of selling of national assets are utterly unfounded? if national assets were really at risk, don't you think the SCB would have been concerned, let alone act as financial advisor to the buyer? and before anyone jumps in to say that SCB executives act independently of the shareholders, please do yourself the favour and check who these people are. from my own experience, i have met some senior people at SCB, and i remember them saying to me that because SCB belongs to the king, everyone has additional responsibility to ensure that the business they do is above board. opinions i've heard from other people in the business community is also that SCB is by far the cleanest bank.

Edited March 15, 2006 by thedude

[otherstuff1957]

Now, correct me if I'm wrong, but doesn't Temasek have to divest itself of 43% of it's Shincorp stock holdings now? (96% - 49% =43%)

If so, how will that affect the price of the shares? Will them just put them back on the stock market or will they look for a private buyer (probably another proxy company)

Anyway, it would be interesting to see some informed commentary on this.

[Plus]

SCB Securities is the financial advisor. SCB bank itself is a shareholder in Cypress, one of the companies involved, and it also provided 11 bil loan to finance the purchase, guaranteed by Singaporean banks.

How it will affect SCB's reputation remains to be seen. No one thought it would end in such mess.

Temasek doesn't own 96% of Shin on itself. Kularb Kaew is a Thai proxy company set up specifically to keep foreign (Aspen and Cedar) share below 50%.

Initially Kularb Kaew planned to sell its shares to Thai investors to repay the loans from SCB and Bangkok Bank and change it's shareholding structure.

Last year SCB extended a loan to Grammy for Matichon and Bangkok Post takeover and were forced to apologise and claim ingorance about the bid's hostile nature when faced with public outcry.

[Jai Dee]

OSC sold Shin Corp shares, adding that the issue is not related to current political situation.

Permanent Secretary of the Labor Ministry Somchai Wongsawad (สมชาย วงศ์สวัสดิ์) revealed that the Office of Social Security (OSC) has bought Shin Corp shares for a long time, adding that it is the OSC’s fund management strategy.

Mr. Somchai commented on the OSC’s move to buy 22.8 billion shares in Shin Corp that the OSC has followed this investment strategy for a long time, adding that the OSC committee comprising employers and employees view that the investment will yield good returns. He added that the investment will not affect the status of the OSC, asking that the people not link this issue with the current political situation. He added that the share purchase was carried out before news of takeover deal by Singapore's Temasek Holdings.

Meanwhile, deputy Secretary-general of the OSC, Tanachol Suriyanakangkul (ธนชล สุริยนาคางกูล) said that the investment board of the OSC decided to buy 32 million shares of Shin at the price of 35 baht per share since the year 2003, as it believed that the investment would yield high returns. He said that the OSC has sold all shares at the price of 49.25 baht per share on March 13 and received net profits of 456 million baht.

However, he said that the share selling is not related to the current political situation.

Source: Thai National News Bureau Public Relations Department - 16 March 2006

[sriracha john]

UPDATE

SHIN TAX SCANDAL

Probe into suspect share sale to begin

Auditor-General investigators pressure Finance Ministry officials to explain how Thaksin's family managed a 'clean' profit

The Auditor-General's Office will question senior officials at the Finance Ministry this week about their role in the non-payment of tax by members of the Shinawatra family in the sale of Shin Corp shares, a source said yesterday.

The office suspects that director-general of the Revenue Department Sirote Swasdipanich, deputy director-general Paitoon Pongkesorn, director of the Bureau of Legal Affairs Moreerat Boonyasiri, official Krich Vipulanusarn and ministry inspector-general Bengja Louichareon of helping two children of caretaker Prime Minister Thaksin Shinawatra evade tax payment, the source said.

The office will request each of them to provide information relating to Panthongtae and Pinthongta Shinawatra's purchase of Shin Corp shares from Ample Rich Investment Ltd.

The Shinawatra family then sold their entire Shin Corp shareholding for Bt73 billion to Singapore's Temasek Holdings in January, without paying tax.

The deal caused a public outcry and led to the current political crisis.

A few days before the sale of the shareholding, Panthongtae and Pinthongta bought 329.2 million Shin Corp shares from Ample Rich for Bt1 apiece.

Ample Rich was created by Thaksin, the founder of Shin Corp, and registered in the British Virgins Islands, a well-known tax-haven.

Critics say Thaksin's two children should pay income tax worth Bt5.85 billion because they had a capital gain as the market price per share was Bt49 and the deal took place outside the stock market.

But the Revenue Department defended the Shinawatras, saying the deal should not be subject to tax payment because they bought the shares at less than the market price and held the securities.

The two later sold the shares through the stock market, giving them a tax exemption for capital gains received by individuals.

The ruling sparked criticism among tax experts at several universities, with many saying tax officials had discriminated in favour of the Shinawatras.

They pointed to a previous Revenue Department ruling which said that employees receiving shares from their employers had to pay tax, even though they had not yet sold the shares.

The department is insisting that this ruling should not be applied to the Ample Rich deal because the relationship between employer and employee has special legal aspects.

Critics, however, dispute this, saying the two were executives of Ample Rich so they also had legal obligations similar to those between employer and employee.

The Auditor-General made a first request for information in the case to the department last month but Paitoon turned it down, saying the request should have been more specific.

"This time we narrowed down our request and expect them to comply. If not, legal action will be launched against them [the Revenue Department]," said the source.

The daily newspaper Matichon last week revealed two letters between the department and a close aide of Thaksin's wife Khunying Pojaman, asking and replying about tax matters related to the Shin Corp deal.

Matichon suggested the department may have tried to help the Shinawatra family evade taxes.

The Nation

[dr_Pat_Pong]

Stinks to high heaven

[Ricardo]

This is an outstanding example of a government department being very helpful to its citizens,going to great lengths in finding ways to avoid paying tax, and I sincerely wish that the UK tax-authorities were this helpful. Truly the hub of assistance in tax-evasion.

No wonder Thailand is the Land of Smiles.

[Jai Dee]

OAG investigators asked to explain Shin tax probe

The Council of State has invited investigators from the Auditor-General's office (OAG) to a meeting today to explain their actions in regard to tax officials who assessed aspects of the Shin Corp takeover.

The meeting follows a Revenue Department petition to the Council of State querying whether the OAG was authorised to investigate its senior officials.

Revenue Department director-general Sirote Swasdipanich has asked the Council to outline the scope of the OAG's "duty", according to a source at the department.

Sirote and four other senior officials - deputy director-general Paitoon Pongkesorn, director of the bureau of legal affairs Moreerat Boonyasiri, tax official Krich Vipulanusarn and Finance Ministry inspector Bengja Louichareon - have been in the hot seat since OAG investigators started a legal procedure to question them last month.

The reaction by the Revenue Department came as a surprise to investigators. "There has never been a state agency targeted by the Auditor-General, questioning its legal duty," an OAG source said.

He insisted that, as an independent organisation assigned by the Constitution, the OAG had a legal obligation to investigate tax collection. "We are wondering why the Council of State asked to meet us, instead of requesting to meet the tax officials," the source said.

In January, Premier Thaksin Shinawatra's family sold a majority stake in Shin to Singapore's Temasek Holdings for about Bt73 billion. The tax-free deal caused a public outcry and sparked the political crisis.

Just before the deal, Thaksin's two children bought 329.2 million Shin Corp shares from Ample Rich for one baht each. Ample Rich was created by Thaksin, the founder of Shin, and registered in the British Virgin Islands, a tax haven.

Critics argued that Thaksin's children should pay income tax of Bt5.85 billion because they reaped a capital gain. The shares had a market price of Bt49 each and the deal took place outside the stock market.

But the Revenue Department defended the deal, saying no tax was due as people who bought shares at below market value should not pay tax while they held those securities.

The two later sold the shares on the stock market, which gives tax exemption for capital gains received by individual investors.

OAG investigators want to probe if top Revenue officials helped the PM's children evade tax.

The department believes the OAG has no legal authority to investigate a tax case and is seeking confirmation from the Council of State. At best, it would only send tax information to the OAG, the source said.

Tax officials insist OAG has no authority because they must first finish taxing the Shinawatras, with payments due next year for business transactions this year. The OAG may have authority once tax was collected, the source claimed.

Source: The Nation - 15 August 2006

[Chang_paarp]

sriracha john Posted 2006-08-07 01:29:27

Critics say Thaksin's two children should pay income tax worth Bt5.85 billion because they had a capital gain as the market price per share was Bt49 and the deal took place outside the stock market.

That should just about pay for the July and October elections. Maybe if they donated it to the election commission .......

[sriracha john]

Thaksin's kiddies lose another round in the battle to see if the auditor-general's probe will go on:

OAG gets powerful backing

The Council of State, the government's legal advisory body, has initially supported the Office of the Auditor-General's (OAG) move to investigate whether the Revenue Department helped the children of caretaker Prime Minister Thaksin Shinawatra to evade tax.

It advised tax officials yesterday to accede to demands to meet OAG investigators, an informed source said. However, it has not yet concluded whether the OAG can scrutinise the tax-collection role of the Revenue Department.

A Council of State legal team, chaired by Meechai Ruchupan, met Revenue Department director-general Sirote Swasdipanich and OAG investigators.

The Revenue Department wanted to consult legal experts about whether the OAG had authority under the Constitution to scrutinise tax collection.

The OAG launched an investigation last month by asking five officials to explain the controversial tax-free deal relating to the takeover of Shin Corp by Singapore's Temasek Holdings in January.

The Revenue Department argued the OAG did not have authority. It also said the OAG should wait until March next year when individuals declare personal income tax payments.

However, its current stand apparently contradicts its previous statement that no tax payments were due.

The source said tax officials were advised by the Council of State to meet OAG investigators but they may or may not give any information related to the deal. Five senior officials, including Sirote, are expected to meet investigators this week and next week.

Outsiders have expressed their support for the OAG action.

Research director Somkiat Tangkitvanich said the Revenue Department should come under investigation over its tax-collection practices. In the long run, the Revenue Department should be independent from politicians in order to prevent political intervention, he said.

Caretaker Finance Minister Chaiyot Sasomsub warned: "Final legal power does not rest with the independent organisation (OAG) but with the courts. The Revenue Department does the right thing when it consults the Council of State first."

The Nation

[cclub75]

Thaksin's kiddies lose another round in the battle to see if the auditor-general's probe will go on:

You look highly optimistic...

I refer to :

http://www.nationmultimedia.com/2006/08/16...ss_30011183.php

When you see that the Deputy Commerce Minister dares to say :

-that they need to a "define" the word "nominee" before to investigate the Kularb case (who owns Shin)

-that this task would take "2 months"

-and the whole process "5 years" !!!!

... then you have to ask yourself : we are living in wonderland. And Thaksin, if he remains in power, will eventually win the battle.

We all know where and who is the last counter power to Thaksin's megalomany... And we know that this counter power will not last forever.

Time is running in favor of Thaksin. He knows it.

He just need to win the next elections. That victory would then silence all the opponents who are -still- holding official position within institutions : the intimidation process will be eventually overhelming.

That is the heart of Thaksin's system : power of money and power of intimidation/coercition.

OK he lost april, he lost EC... But theses are minor defeats (political ones).

His only weak point is the Shin sale (that event triggered the dissolution) and the fact that Temasek used nominees, against the thai law. And on this particular ground, we have seen absolutly no progress in investigation nor legal actions.

Right now : their only strategy is to delay decisions/informations/investigations. Because, after an electoral victory and a new 5 years long mandate, all this farce will become useless : fear will take over. Fear will deflate the debate amongst the public and the officials against Thaksin's rule.

And fear is the best, the ultimate tool for a dictator.

[Ricardo]

Caretaker Acting Prime Minister Thaksin is no doubt fully supporting the OAG in this affair, since they are of course an important element, of his much publicised campaign against corruption.

Interesting that some people in the government don't accept the Auditor-General's role entitles, or indeed requires, her to investigate government deprtments. Who do they suggest she audits, instead of them, I wonder ?

Possibly he is unfamiliar, despite his wide experience of business, with the normal role of Internal-Audit ?

[Plus]

Even if Thaksin wins, and wins big, he will not be accepted by a large, and I mean LARGE part of population. He won ok in April, yet this divisiveness forced him to "abduct". He only deepened the gap since then.

Maybe he is banking on Thai forgiveness, that after so many months people wouldn't mind if he returns. Maybe it will work, most probably won't as he burned all the bridges and abandoned all hope of reconciliation.

The best solution is to put him straight through the courts, not to invite PAD on the streets again. The courts have been asked to sort the post-electoral mess, I hope they are smart enough not to ignore Shin Sale mess until explicitly asked to sort that one, too.

[sriracha john]

I hate to split up these threads, but it seemed more appropriate to place this article in the election thread.

It does, however, address issues of all the last 3 posts by cclub75, Ricardo, and Plus :

http://www.thaivisa.com/forum/index.php?s=...st&p=850495

A stinging, very-well-written, news editorial,

btw.

I don't envy Jai Dee moderating across all these threads at all,

btw part II.

A thumbsup to him:

[sriracha john]

<snip - duplicate post deleted>

Thanks BTW SJ...

Edited August 21, 2006 by Jai Dee