Temasek’s investment in Thailand shaken

This article is published by Bangkok Post on 5 February 2011.

The Singaporean government’s investment arm, Temasek Holdings, is expected to fight any attempts by TOT Plc to seek billions of baht in compensation from Thai telecoms companies in which it has holdings, say observers.

Finance Minister Korn Chatikavanij

TOT announced on Tuesday it will seek 214.7 billion baht in compensation from local telecom operators – including AIS, which is owned by Temasek – for unpaid access charges and losses resulting from improper policy changes made by past governments.

The news, which shook the Thai share market, is likely to cast Temasek’s Thai investments under a cloud, said a Post Today writer.

Investments in the Thai share market by Temasek face a period of uncertainty, he said.

Temasek Holdings has invested in the telecommunications, energy and hospital sectors here.

Some believe its willingness to invest in Thailand was tied to the fortunes of former prime minister Thaksin Shinawatra.

Once Thaksin was toppled from power, Temasek Holdings’ investments in Thailand started to look less attractive to the company.

Now, the findings of a committee appointed under Section 22 of the Joint Public/Private Venture Act 1992 could shake up Temasek’s investments still further.

The committee recommended that state-owned TOT sue Advanced Info Services (AIS), its mobile phone concessionaire, for over 70 billion baht in damages caused by amendments to its concession contract during the time Thaksin was in power.

Singapore telecoms giant Singtel and Temasek Holdings stand to be affected, as they are the major shareholders in Shin Corp and AIS.

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