The government yesterday denied reported political interference into an inquiry into whether Kularb Kaew, the company that indirectly owns Shin Corp, was a proxy of Singapore's investment arm Temasek Holdings.

Caretaker Deputy Commerce Minister Preecha Laohapongchana said: "I have never interfered with the investigation, which is conducted entirely by the ministry's officials. Once the committee reaches a conclusion on this, it just needs to inform me the result."

Preecha launched the defence following a report the ministry's Business Development Department has completed the investigation but politicians have pressed officials to delay the announcement.

The report followed the ministry's decision last week to set up a committee, chaired by deputy permanent secretary Yanyong Phuangrach, to investigate the issue.

The move was interpreted as a bid to stall the announcement, which could hurt the Temasek-Shin Corp deal.

The takeover sparked wide public anger towards caretaker Prime Minister Thaksin Shinawatra, whose family sold its majority stake in Shin to Temasek.

Preecha said the committee's main task was to define what "nominee" was, because the term was not defined in the Alien Business Act BE 2542, on which the ministry based its investigation. "Appearing in the law is only the word 'alien'. Now that something strange comes up, it is difficult to reach a judgement [without the term 'nominee' defined]," he said.

He said the committee should take two months to complete its job. With a clear definition, the ministry would be shielded from lawsuits if the investigation contained any errors. "We need to be careful or the government could be hit back. This is a long process. After we get the definition, the case would be forwarded to police, then prosecutors and the court. It could take five years to complete the proceedings," he claimed.

He also said the committee was set up after Surin Upatkoon - a major shareholder in Kularb Kaew, whose business base is in Malaysia - submitted an additional 200-page declaration. The document highlighted Surin's strong intention to invest in Thailand, where he was born.

Meanwhile, Commerce permanent secretary Karun Kittisataporn sought to distance himself from the matter. He said yesterday that despite his seniority over Yanyong, he had nothing to do with the investigation.

"Khun Yanyong has full authority over the Business Development Department. He reports directly to the minister, so far 90 per cent of what he has achieved. He consults me only when complicated issues are involved. I don't have a right to intervene his duty," Karun said.

The Business Development Department originally planned to wrap up the investigation last month, but the matter has now been delayed twice.

Orajit Singkalavanich, director-general of the department, said earlier that ministry legal staff should have announced findings of the investigation by last Friday. Orajit is due to retire at the end of September.

Points for consideration in deciding if the company acts on behalf of foreigners include share-transaction information, returns on investment, management authority, voting rights and the relationship between alleged offenders and shareholders.

If Kularb Kaew is found to be a nominee, it would have a major impact on Shin, particularly iTV, as foreigners are barred from operating television stations in Thailand. Thai ownership law prohibits foreigners from holding more than 49 per cent in Shin.

Kularb Kaew was an integral part of Temasek's takeover and set up so Shin would remain a Thai company after the deal. There were claims from the start it was a nominee of the Singapore investment giant because the voting rights of Thai shareholders were limited to 10 per cent, when their combined stake was 51 per cent. Another firm - Cypress Holdings - had 90 per cent voting rights.

Amid a flood of criticism, Pong Sarasin and Suphadej Poonpipat, who originally held the 51-per-cent stake in Kularb Kaew, diluted their shareholdings to just 4.25 per cent. Cypress Holdings' stake was also reduced, to 27.7 per cent. Then, Surin Upatkoon, the Thai businessman who has built an empire in Malaysia, emerged as the major shareholder, with a 68-per-cent stake.

Petchanet Pratruangkrai

The Nation