Thai Verdict on Thaksin’s Billions Unnerves Society, Investors
Feb. 24 (AFP) -- A Thai court will decide this week whether to seize about $2.32 billion from fugitive Prime Minister Thaksin Shinawatra’s family, a verdict that may widen a societal divide that has deterred investors for four years.
Nine Supreme Court judges will conclude Feb. 26 if Thaksin controlled the country’s top mobile-phone operator and other firms during his five-year tenure and used his position to boost their value. Since the army ousted Thaksin in 2006, courts have disbanded parties linked to him that won the past two elections.
The power struggle has split Thailand into rival camps that disagree on how much authority appointed soldiers, judges and royal advisers should wield over elected politicians. Protests by the two sides, one wearing yellow and the other red, have led to airport blockades, rioting and bombings since the coup.
“We’re avoiding Thailand,” said Burkhard P. Varnholt, who manages about $30 billion as chief investment officer of Switzerland-based Bank Sarasin & Co. “It’s a very attractive market that we would like to get back into, but we need to get more comfortable with the political situation.”
Since the coup, Thailand’s SET index has trailed benchmarks in Singapore, Malaysia, Indonesia and the Philippines. Foreigners have been net sellers of $205 million of Thai stocks this year, the most in Southeast Asia after Vietnam, according to data compiled.
The baht has gained 2.7 percent against the dollar over the past six months, sixth-highest among Asia’s 10 most-actively traded currencies. Bonds have performed better, returning 2 percent so far this year, the second-best performance among 10 Asian local-currency debt indexes compiled by HSBC Holdings Plc.
‘Vastly Positive’
“If the political situation clears up it would be vastly positive for a number of Thai assets, including the currency and equities,” said Rajeev de Mello, Singapore-based head of Asian investment at Western Asset Management Co., which oversees $506 billion globally. “For government bonds, it’ll probably be a bit more negative.”
The case to seize Thaksin’s assets was started after the coup. Prosecutors are seeking to confiscate the 76.6 billion baht ($2.31 billion) that Thaksin’s family received from its 2006 sale of Shin Corp. to Temasek Holdings Pte, Singapore’s state-owned investment firm.
The court is “widely expected” to seize the money, Suwat Bumrungchatudom, an analyst with Bualuang Securities Pcl, which has a tie-up with Morgan Stanley for Thai research, said in Feb. 9 report. An acquittal “would not only be very embarrassing for the government, it would throw its legitimacy into question,” he wrote.
Abuse of Power
Prosecutors argued that Thaksin concealed ownership of his stake in Shin Corp., which controls companies including Advanced Info Service Pcl, Thailand’s biggest mobile-phone operator. They accused him of abusing his power to benefit the firm, including influencing changes to Advanced Info’s royalty payments to its concession holder.
Thaksin refutes all the charges against him, and will “keep all options open” after the verdict, including filing an appeal if necessary, said Noppadon Pattama, a former foreign minister and a member of Thaksin’s legal team. During the verdict Thaksin will be in Dubai, his home for most of the time since he left Thailand in 2008 to avoid a two-year jail term, Noppadon said.
“We hope that the court would be impartial and offer a fair judgment,” Noppadon said. “Thaksin has been known as a billionaire several years before becoming prime minister.”
Billionaire Businessman
Thaksin, 60, worked at a Kentucky Fried Chicken outlet in the 1970s while studying in the U.S. for a master’s degree. Two decades later in Thailand, he won one of two mobile-phone concessions and an exclusive satellite franchise.
When appointed foreign minister in 1994, Thaksin disclosed that he and his wife were worth 60 billion baht - $2.4 billion at the time. The couple transferred their Shin Corp. stake to their children and relatives before he became prime minister.
Shin shares gained 168 percent from when Thaksin was elected in January 2001 to when he was ousted in September 2006, compared with a 161 percent gain in the benchmark SET index, according to data compiled. Siam Cement Pcl, Thailand’s fourth-biggest company that is controlled by the monarchy’s investment arm, gained 733 percent in that time.
Thaksin’s red-shirted supporters have threatened large demonstrations after the verdict to repeat demands that Prime Minister Abhisit Vejjajiva call an election. The army has placed about 5,400 soldiers on standby and police have set up about 170 checkpoints in the capital to inspect vehicles for weapons.
Abhisit took power in December 2008 after a court dissolved the pro-Thaksin ruling party for vote buying under a clause in the 2007 constitution drafted after the coup. An election must be called by the end of next year.
“We cannot talk about the case in legal terms because it stems from the coup, which is wrong from the beginning,” said Kanin Boonsuwan, a law lecturer at Bangkok’s Chulalongkorn University. “The only way to make people trust again in the judicial process is to return the political process to the people and let them decide for themselves.
AFP Global
Thaksin Calls for Revolution
Monday, 13th April, 2009
The exiled, ousted Thai politician Thaksin Shinawatra has declared that now the Thai army has tanks on the streets of Bangkok, ‘it is time for people to come out in revolution.’ Thousands of his red-shirted supporters brought chaos to the Thai capital over the weekend and forced the cancellation of a planned summit of leaders from the 10 ASEAN (South East Asian) countries in the coastal resort of Pattaya. They are calling for the resignation of Prime Minister Abhisit Vejjajiva, who was voted into power by the parliament in December, and has now imposed a state of emergency. Thaksin was removed from the premiership in 2006.
The Red Shirts have become increasingly violent in their anti-government protests, setting fire to buses, attacking government cars and throwing missiles, including petrol bombs, at police. But in return, the army has gone out onto the streets, firing live rounds into the crowds, as well as into the air, causing dozens of injuries. Fatalities are certain if the confrontation does not stop and there must be a likelihood of the military making a coup d’etat, as they have done on various occasions in Thailand’s recent history, unless some semblance of calm is restored.
For the time being, Abhisit says he is hanging on in there, but his political position is perilous. And he can hardly complain about the Red Shirts taking to the streets, as the rival, conservative Yellow Shirts, who brought Bangkok’s airports to a standstill four months ago, as well as camping out in the capital’s administrative area, were larely responsible for the chain of events that brought him to power.
