Published on December 19, 2005

Their children may hold the shares, but the public still believes the real influence lies with the first couple. The rumours have hit at a somewhat ironic moment. Just a couple of days after his family’s business empire was declared, once again, to be the wealthiest in the stock market, Prime Minister Thaksin Shinawatra had to watch leading Shin Corp figures deny “unconfirmed reports” that Singapore Telecom was getting ready to take over his flagship company.

Strong as the denials by Khunying Pojaman and Shinawatra Shin Corp chief executive Boonklee Plangsiri may have sounded, few political observers took the SingTel rumours with a grain of salt.

And nobody believes the speculation will go away quickly.

Maybe it’s the price Shin Corp has to pay for its unbreakable connections with – according to a recent poll – the most politically influential couple in Thailand. Despite having transferred their shares in the business empire to their children, Thaksin and Pojaman have failed to rid Shin Corp of the shadows of their domination. After all, who would believe that their college-going daughter Pinthongta has on her own managed to keep an eye on the markets and to consolidate her position as the nation’s richest stock investor for the second consecutive year.

Since Shin Corp can’t quite detach itself from the couple, it’s natural that the company’s well-being has become intertwined with politics. The SingTel “rumours” have come about at a time when Thaksin’s popularity is at its lowest point yet. But this is the second time that Shin has had to deny takeover reports in as many months. The first batch of rumours surfaced in October when Telenor of Norway successfully took over United Communications Industry (Ucom) in an Bt8-billion deal. The transaction separated the Bencharongkul family from its telecom flagship, a major competitor of Shin.

Supposing the rumours are true, what could possibly be the motives?

Theories range from a noble plan to kill off the haunting political issue of conflicts of interest to the less laudable idea of getting Shin Corp out of the potentially disastrous unpredictability of Thai politics. Is Thaksin feeling “insecure” about his business? Is he planning to step down with honour? Or is he planning to stage a dramatic political fightback starting with getting rid of what is perceived as his weakest point?

Nobody would know for sure, and now we will have to take the Shin Corp executives’ denials as real. One thing is certain, though: As long as Thaksin is firmly attached to Shin Corp, his political life will not get any easier.

The latest blows have come in the form of the “good news” regarding Pinthongta’s wealth and the enviable success of Shin stocks, and a high-profile academic’s analysis of why the business empire has been doing so well.

Dr Pasuk Phongpaichit, an economist from Chulalongkorn University, has noted how companies on the Thai stock market with strong political links have enjoyed far bigger increases in their market value and market share than those without political links. The politically connected firms, she said, had benefited from tax breaks, reductions in concession fees, restrictions on new entrants, delays in the implementation of anti-monopoly law and delays in the liberalisation of certain industries.

Only a “tycoon state” could create this kind of lopsided wealth to politically connected companies, Pasuk said.

This kind of warning went unheeded when Thaksin’s popularity was at its dizzying heights. However, when things are no longer rosy, every detail of his family’s wealth could come under the microscope. Shin Corp will face growing pressure, and so will Thaksin.

But the two names have risen together and become inseparable, so many may be tempted to assume that they will continue to stick together come what may.

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